The financial results of many corporations reporting today were disappointing, however the majority of equities in the stock market in the United States rallied due to positive outlook over the growth of the global economy.

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The International Monetary Fund (IMF) indicated in its revised World Economic Outlook that the global economic growth rate will be 3.7% this year. The IMF projected that the U.S. gross domestic product (GDP) will climb 2.8%, Japan’s GDP will increase 1.7% and the United Kingdom will gain 2.4%.  China’s economy is estimated to grow 7.5%.

According to Bloomberg, hedge fund managers John Paulson and Jeff Altman believe that stocks will continue to surge this year. Both hedge fund managers are convinced that the stock markets are strong enough to endure the gradual reduction of the monthly bond buying program of the Federal Reserve.

In an interview, Altman said, “The wind will continue to be at the markets’ backs with the Fed.”

U.S. Markets

  • Dow Jones Industrial Average (DJIA)- 16,414.44 (-0.27%)
  • S&P 500- 1,843.80 (+0.28%)
  • NASDAQ- 4,225.76 (+0.67%)
  • Russell 2000- 1,174.60 (+0.53%)

European Markets

  • EURO STOXX 50 Price EUR- 3,153.08 (0.00%)
  • FTSE 100 Index- 6,834.26 (-0.04%)
  • Deutsche Borse AG German Stock Index DAX- 9,730.12 (+0.15%)

Asia Pacific Markets

  • Nikkei 225- 15,795.96 (+0.99%)
  • Hong Kong Hang Seng Index- 23,133.12 (+0.45%)
  • Shanghai Shenzhen CSI 300 Index- 2,187.41 (+0.99%)

Stocks in Focus

The stock price of Alcoa Inc (NYSE:AA) rose more than 6% to $12.13 per share after  JPMorgan analyst Michael Gambardella upgraded its rating for the shares of the aluminum giant from Neutral to Overweight and raised its price target from $9 to $15 per share.

The Dow Chemical Company (NYSE:DOW) gained more than 6% to $45.93 per share after Third Point, the hedge fund managed by activist investor Daniel Loeb, disclosed that it acquired a stake in the company, and urged the company to spin off its petrochemical business.

In a letter to investors, Third Point wrote, “We believe that Dow would best serve shareholders’ interests by engaging outside advisers to conduct a formal assessment of whether the current petrochemical operational strategy maximizes profits and if these businesses align with Dow’s goal of transforming into a specialty chemicals company.”

On the other hand, the stock value of Johnson & Johnson (NYSE:JNJ) declined by 1.08% to $94.03 after the company provided a cautious outlook regarding its earnings for 2014. The company projected that the sales its prescription drug will likely decline this year. The healthcare company estimated that it will be able to deliver a profit in the range of $5.75 to $5.85 per share in 2014.