S&P 500 extends record as gold, silver climb on Yellen remarks

U.S. benchmark stock indexes extended records, while silver and gold rose, as Federal Reserve chairman nominee Janet Yellen said she wants to maintain stimulus until the economy improves. The yen and euro weakened as reports showed slowing economic growth.

The Standard & Poor’s 500 Index climbed 0.5% to 1,790.26 at 3:32 p.m. in New York, setting an all-time high for a second day. The MSCI All-Country World Index climbed 0.8% and the MSCI Emerging Markets Index jumped 1.4% to end a 10-day slump, its longest in seven years. Silver and gold for December delivery climbed 1.4% to lead commodities higher. Treasury 30-year yields slipped 2.7 basis points to 3.79% as bonds pared gains following a $16 billion auction. The yen slid versus all 16 major peers and the euro fell versus 13.

The U.S. economy and job market are performing “far short of their potential” and a strong recovery will ultimately enable the Fed to reduce its stimulus, Yellen said in testimony at her nomination hearing today. Economic growth slowed in Japan and the euro area last quarter, reports showed, while American jobless claims topped economists’ estimates.

Yellen “sounded awfully dovish and did not give any indication that she’s ready to pull back on the amount of bond buying that the Fed’s doing,” Chris Gaffney, St. Louis-based senior market strategist at EverBank Wealth Management, said in a phone interview. “Equities are looking at more stimulus as a positive.”

‘Surest Path’

The Federal Open Market Committee will probably wait to taper its bond buying to $70 billion at its March 18-19 meeting from current pace of $85 billion a month, according to the median of 32 economist estimates in a Bloomberg survey Nov. 8.

“Supporting the recovery today is the surest path to returning to a more normal approach to monetary policy,” Yellen said in her testimony to the Senate Banking Committee. A “strong recovery will ultimately enable the Fed to reduce its monetary accommodation and reliance on unconventional policy tools such as asset purchases.”

Among U.S. stocks moving today, Home Depot Inc., Walt Disney Co. and Boeing Co. rose more than 1.4% to lead gains that sent the Dow Jones Industrial Average to a record for a second straight day.

Cisco Systems Inc. plunged 12% for its biggest drop in more than two years. The world’s largest maker of computer- networking equipment forecast its first quarterly sales decline in four years. Office Depot Inc. gained 3.4% after Bank of America Corp. recommended investors buy the stock.

Of the 460 S&P 500 members that have reported earnings this season, 75% posted profit that beat estimates, while 54% topped sales projections, data compiled by Bloomberg show.

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