Yellen, talking up her book

U.S. stocks climbed as remarks from Federal Reserve Chair Janet Yellen bolstered confidence that the central bank will react if the outlook for economic growth worsens. European shares fell and the yen strengthened as tension increased in Ukraine.

The Standard & Poor’s 500 Index rose 0.5 percent to 1,853.52, above its record close for the fourth straight day, at 1:45 p.m. in New York. The Stoxx Europe 600 Index declined 0.2 percent as profit at WPP Plc and Allianz SE missed estimates. Japan’s currency appreciated 0.2 percent to 102.17 per dollar while Ukraine’s hryvnia reached a record low. Ten-year U.S. Treasury yields slipped four basis points to 2.65 percent and Italy’s 10-year yield fell to the lowest level since 2006.

While Yellen reiterated that the Fed will likely continue to reduce its quantitative easing program, she said asset purchases were not on a preset course and a “significant” change in the economic outlook could cause policy makers to alter strategy. She acknowledged that “adverse weather conditions” may be to blame for weakening economic data recently. An earlier report today showed U.S. durable-goods orders fell less than forecast, signaling manufacturing was beginning to emerge from the harsh winter.

“Yellen said that they would consider pulling back on their tapering schedule if the economy slowed in a meaningful manner,” Matt Maley, an equity strategist with Miller Tabak & Co., said in an interview from Boston. “She also said that the data had been weaker since she last spoke to Congress two weeks ago. So it’s a bit of a change. She seems to be more willing to step back on the accelerator than she was when she last spoke to Congress.”

Market Leaders

Verizon Communications Inc. and Goldman Sachs Group Inc. rose more than 1.7 percent for the biggest gains in the Dow Jones Industrial Average.

J.C. Penney Co. jumped 24 percent after forecasting an increase in annual revenue and margin expansion. Gap Inc. is scheduled to report earnings today. About 70 percent of the 482 companies that have posted results this season beat analysts’ profit estimates, data compiled by Bloomberg show.

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