Stocks rallied Wednesday as the dollar pulled back and Fed Chairman Ben Bernanke pledged to keep rates low for a long time in his semi-annual testimony before Congress. Financials were among the top gainers.
"The dollar sold off and the market rallied," said Dave Rovelli, managing director of equity trading at Canaccord Adams.
The dollar had already been incurring profit-taking, Rovelli said, then took another hit when Bernanke said the Fed would likely keep rates low "for an extended period."
Traders shrugged off a report that showed new-home sales dropped 11.2 percentin January to a record 309,000-unit annual rate, the third straight monthly decline. Economists had expected the pace to increase to 360,000.
"I think people are really getting immune to that number — it doesn't hold as much merit," Matt Cheslock, a senior specialist at Cohen Specialists, said of the new-home sales report.
Plus, "Bernanke's saying he's seeing some light at the end of the tunnel in commercial real estate," Cheslock said. "I think that's also helped. I think people were concerned about that being the next shoe to drop. It's not as bad as people think — and that's going to help the market rally," he explained.
This came after yesterday's selloff, when major indexes posted their biggest losses since early February.
Financials, technology and consumer discretionary were the leading sector gainers on the Standard & Poor's 500 while telcomms, and utilities were at the back of the pack.
In financials, AIG , SunTrust and Zions Bancorp were among the biggest percentage gainers, all up more than 3 percent. Citigroup was up more than 2 percent.
The top gainers on the Dow were Bank of America, JPMorgan, Intel and Hewlett-Packard.
Some M&A news today: American Tower will buy India's Essar Group's tower unit for $432 million in an equity and debt deal that is expected to expand the world's fastest-growing mobile market.
Industrial conglomerate Emerson Electric said orders turned positive last month due in large part to currency benefits.
Shares of Arena Pharmacaceuticals jumped after the company had its application accepted for an experimental obesity drug.
Toyota's CEO, Akio Toyoda,is testifying on Capitol Hill today about the automaker's recent recall troubles. It's the second consecutive day of grilling for Toyota executives, with Toyota USA chief Jim Lentz answering questions for two hours Tuesday.
Toyota isn't the only automaker with recalls in the news: Hyundai Motor has announced it will recall 47,000 of its new Sonata sedans to fix faulty door latches.
The Treasury will auction $42 billion in 5-year notes today, with the results, as usual, available shortly after 1 pm.
President Obama will address the Business Roundtable at 1 pm, trying to gather support for his various initiatives. That follows a White House dinner last night with a number of prominent CEOs, including JPMorgan's Jamie Damon, GE's Jeff Immelt, and Verizon's Ivan Seidenberg.
EU regulators begin a preliminary antitrust probe into Google , involving the way it deals with advertising partners and ranks search results.
Still to Come:
WEDNESDAY: New-home sales; Bernanke testifies; Toyota hearing; Obama business roundtable; five-year note auction; Earnings from Dollar Tree and Toll Brothers
THURSDAY: Weekly jobless claims; durable-goods orders; Bernanke testifies; Fed's Pinalto, Bullard speak; Apple shareholder meeting; Buffett lunch; health-care summit; seven-year auction; financial-industry compensation hearing; Earnings from Kohl's, Liberty Media and Gap
FRIDAY: 2nd read on Q4 GDP; consumer sentiment; existing-home sales; Fed's Kocherlakota speaks; Madoff hearing; Earnings from Berkshire Hathaway
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