Dow Gains Over 90 After Bernanke Testimony
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 Dow Jones Industrial Average gained more than 90, or 0.9 percent, clawing back most of the 100 points it lost in the prior session's selloff.
"The dollar sold offand 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.
The Treasury's five-year auction was weak, with a high yield of 2.395 percent and a bid-to-cover ratio of 2.75.
President Obama vigorously defended his economic agenda in remarks at a Business Roundtable of some of the nation's top executives including JPMorgan's Jamie Damon, GE's Jeff Immelt, smacking down allegationsthat his stimulus policies are socialist.
"Contrary to the claims of some of my critics, I am an ardent believer in the free market,'' Obama said in prepared remarks.
Financials, technology and consumer discretionary were the leading sector gainers on the Standard & Poor's 500 while materials, and utilities were at the back of the pack.
In financials, Keycorp, AIG and SunTrust were among the biggest percentage gainers, all up more than 4 percent. Citigroup gained 3 percent.
The top gainers on the Dow were Bank of America, JPMorgan, Home Depot and Intel.
Autodesk rose sharply after the engineering-software maker beat earnings expectations.
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.
"I'm deeply sorry for any accidentthat Toyota drivers have experienced," said Toyoda, the grandson of the founder of the world's largest automaker.
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.
EU regulators begin a preliminary antitrust probe into Google , involving the way it deals with advertising partners and ranks search results.
Volume was once again below average, with about 7.63 billion shares changing hands on the three major exchanges. Advancers outpaced decliners, roughly 11 to 4, on the New York Stock Exchange.
Still to Come:
THURSDAY: Weekly jobless claims; durable-goods orders; Bernanke Senate testimony; 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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