Wall Street stocks moved sharply higher on Wednesday, erasing much of the week’s losses, as the Federal Reserve chairman remained steadfast in his support of the Fed’s stimulus policy and data pointed to economic improvement.
By the close of trading, the Standard Poor’s 500-stock index was up 1.3 percent, the Dow Jones industrial average rose 1.3 percent, or about 175 points, and the Nasdaq composite jumped 1 percent.
In his second day before a congressional committee, Ben S. Bernanke repeated testimony in which he defended the Fed’s policy of buying bonds to keep interest rates low in order to promote growth and bring down the unemployment rate.
The remarks helped the market rebound from its worst decline since November and put the S.P. 500 back above 1,500, a closely watched level.
The comments also seemed to remove a headwind from markets that last week contributed the first weekly loss for stock indexes after seven weeks of gain on concerns the quantitative easing program could end earlier than had been anticipated.
Adding to the positive tone was United States economic data that showed a gauge of planned business spending in January recorded its largest increase in just over a year, while contracts to buy new homes neared a three-year high last month.
The S.P. 500 had climbed 6 percent for the year and came within reach of all-time highs before pulling back on concerns about Fed policy, as well as this week’s inconclusive elections in Italy, which rekindled fears of a new euro zone debt crisis.
The S.P. 500 was still down 0.2 percent for the week so far, after a plunge on Monday that was the index’s biggest daily drop since November.
“While the rally remains intact and there are reasons to be long-term bullish here, there are also reasons to not be surprised if we get a correction,” said Tom Mangan, a money manager at James Investment Research in Xenia, Ohio.
In earnings news, Priceline.com gained 3.4 percent after reporting adjusted earnings that beat expectations. TJX jumped 1.7 percent to after the retail chain operator posted higher fourth-quarter results. The SP retail index climbed 1.6 percent.
Target appeared poised for a solid showing in the first quarter and forecast a higher profit for the full year after a weak performance in the key holiday season. The stock dipped 1.1 percent.
In Europe, shares rose almost 2 percent, steadying after the previous session’s sharp losses, though jitters over the euro zone kept a lid on gains.
Italy’s 10-year debt costs rose more than half a percentage point at the first longer-term auction since an inconclusive parliamentary election, although they remained below the psychologically important level of 5 percent.
Article source: http://www.nytimes.com/2013/02/28/business/daily-stock-market-activity.html?partner=rss&emc=rss
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