Dow, S&P edge up, hit intraday records after Yellen comments
By Sinead Carew
NEW YORK (Reuters) – U.S. stocks advanced in choppy trading on Tuesday, with the Dow and S&P 500 touching intraday records, as investors attempted to interpret testimony by Federal Reserve Chair Janet Yellen.
As investors sought clues on the timing of the Fed’s first interest rate increase since 2006, Yellen told a congressional committee it is preparing to consider hikes “on a meeting by meeting basis,” in a subtle change of emphasis.
Equity investors did not react dramatically because they are likely waiting instead for jobs data due out in a week and its implications for the economy, said Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis.
“There just doesn’t seem to be big reaction by the U.S. stock market,” said Paulsen. “The market may be more focused on the Fed’s boss – the economy – than on the Fed itself.”
But some investors took a clearer reading of Yellen’s comments.
“The Fed is not leaning against the wind, which is the typical thing. They are trying to get out of the box they made for themselves in dealing with the crisis. She is really eager to do this even if the economy is not that strong,” said Milton Ezrati, senior economist and market strategist at Lord Abbett in Jersey City, New Jersey.
The S&P/Case Shiller composite index of home prices in 20 metropolitan areas gained 4.5 percent in December above the 4.3 percent forecast and 4.3 percent in November.
Other data showed the U.S. services sector expanded in February at its fastest pace since October, according to a preliminary reading from financial data firm Markit. But U.S. consumer confidence fell more than expected in February, according to the Conference Board.
Home Depot (HD.N) shares gained 3.9 percent, boosting the S&P 500 and the Dow. The home improvement retailer reported a better-than-expected quarterly same-store sales and announced an $18 billion share buyback program.
The Dow Jones industrial average (.DJI) rose 89.71 points, or 0.5 percent, to 18,206.55, the S&P 500 (.SPX) gained 4.44 points, or 0.21 percent, to 2,114.1 and the Nasdaq Composite (.IXIC) added 1.58 points, or 0.03 percent, to 4,962.55.
JPMorgan Chase (JPM.N) climbed 2.5 percent after the bank told investors it aims to save about $1.4 billion in annual expenses. It also forecast about 10 percent core loan growth in 2015.
Toll Brothers (TOL.N) rose 4.1 percent, helping to lift the PHLX housing index (.HGX). The largest U.S. luxury homebuilder reported a higher-than-expected quarterly profit and raised the low end of its full-year home delivery forecast.
Advancing issues outnumbered declining ones on the NYSE by 1,726 to 1,280, for a 1.35-to-1 ratio; on the Nasdaq, 1,441 issues rose and 1,238 fell, a 1.16-to-1 ratio favoring advancers.
The S&P 500 was posting 65 new 52-week highs and no new lows; the Nasdaq Composite was recording 113 new highs and 23 new lows.
(Additional reporting by Chuck Mikolajczak and Daniel Bases Editing by Chizu Nomiyama and Nick Zieminski)