NEW YORK -- Investors nudged the stock market to all-time highs Wednesday despite a handful of disappointing economic reports.
Google's stock topped $900 for the first time after the company announced several upgrades to its Android software for smartphones, and Macy's rose after beatings Wall Street's profit estimates. Apple fell, holding back the Nasdaq composite index.
The market got off to a weak start, then turned higher in late morning trading. Investors shrugged off a slowdown in manufacturing last month. More signs of slack in the U.S. economy, the thinking goes, means the Federal Reserve will keep pumping money into financial markets.
Terry Sandven, chief equity strategist at U.S. Bank's wealth management group, said most investors have come to expect choppy economic growth, so they take mildly disappointing reports in stride. With companies reporting rising earnings and few appealing alternatives, he sees no reason to sell stocks.
"It's a good backdrop for the market to trend higher," Sandven said.
The Dow Jones industrial average rose 60.44 points to close at 15,275.69, an increase of 0.4 percent.
The Standard & Poor's 500 index gained 8.44 points to 1,658.78, up 0.4 percent. Both closed at all-time highs.
Google gained 3 percent as the online search company unveiled a music streaming service and upgraded features for Google Maps. Google rose $28.79 to $915.89, a gain of 3 percent. It's up 50 percent over the past year.
News of slowing manufacturing in the U.S. and a widespread slowdown in Europe weighed on financial markets in early trading. The Federal Reserve said that U.S. factories cut back sharply on production in April, as automakers produced fewer cars and most other industries scaled back. But the stock market recovered by midday.
"Yes, we're at all-time highs, but valuations are still attractive," Sandven said. The S&P 500 is trading at 15 times earnings for 2013, in line with the historical average of the closely watched price-to-earnings ratio.
Tepid economic growth also keeps interest rates low, which encourages investors to buy dividend-paying stocks instead. More than four out of every 10 companies in the S&P 500 pay a higher yield in dividends than U.S. government bonds pay in interest, according to Sandven.
In other trading, the Nasdaq composite rose 9.01 points to 3,471.62, a gain of 0.2 percent.
Apple's stock took a sudden turn lower after reports said that a hedge fund run by the billionaire David Tepper slashed its holdings in the tech company. Apple lost $15.01 to $425.85, a 3 percent drop.
Strong corporate profits have supported the market's rally this year. Quarterly earnings reached a record in the first quarter, according to S&P Capital IQ, rising 5 percent from the year before. Telecommunication companies have led the way. The S&P is up 16 percent so far in 2013.
Among companies reporting earnings Wednesday, Macy said its profit increased 20 percent. The department-store chain also raised its quarterly dividend by a nickel to 25 cents and announced plans to buy an additional $1.5 billion of its own stock. Macy's gained 2 percent, or $1.18, to $48.57
In the market for U.S. government bonds, the yield on the 10-year Treasury note slipped to 1.94 percent from 1.98 percent late Tuesday. Traders bought Treasurys, pushing yields down, partially in response to news that France became the latest European country to enter a recession. Of the 17 countries that use the euro, nine of them now have shrinking economies.
The Fed's bond-buying program has kept interest rates near historically low levels and encouraged investors to shift money into riskier assets, like stocks. The Fed buys $85 billion worth of bonds every month.
Among other companies in the news:
• Deere & Co. fell 4 percent. The company, which makes farm and construction equipment, reported earnings that beat analysts' expectations but also warned that cool spring temperatures and tepid demand for its products will slow down its sales this year. Deere's stock lost $4.13 to $89.64.
• Computer Sciences dropped 10 percent, the biggest loss in the S&P 500. The information technology company turned in much weaker revenue than analysts had expected. Sales of the company's services to businesses and local governments slumped. Computer Sciences lost $4.78 to $44.71.