Yellen, talking up her book

Economic Data

Durable goods orders decreased 1 percent in January, following a revised 5.3 percent slump in December that was larger than previously estimated, Commerce Department data showed. The median estimate in a Bloomberg survey called for a 1.7 percent decline. Another report showed jobless claims climbed last week.

The S&P 500 was little changed yesterday, closing fewer than 4 points below its record for a third straight day. The gauge topped its previous closing high of 1,848.38 each day this week, only to retreat from that level by the end of the session. The index came within six points of the record each day last week. It reached an intraday record of 1,858.71 on Feb. 24.

The gauge has rallied 6.1 percent since a low on Feb. 3 as investors speculated that severe winter weather explains the weakness in reports such as housing and hiring. Yellen said today in the testimony on monetary policy before the Senate that the Fed “will likely reduce the pace of asset purchases in further measured steps at future meetings” even as it takes time for the job market to recover.

Treasury 10-year note yields touched the lowest level in almost three weeks as political turmoil in Ukraine boosted demand for safety.

Ukraine Unrest

Gunmen occupied parliament and the government building in Ukraine’s Crimea region, lawmakers in the capital met to approve a new cabinet and Russia put fighter jets on alert.

The European Union and the U.S. have pledged aid to the country’s new administration while Russia has questioned its legitimacy and halted a $15 billion bailout.

“What you’ve got with the Ukraine is just one of the many countries that make up the whole investors’ latest map of worry,” David Bianco, chief U.S. equity strategist at Deutsche Bank Securities Inc., said in an interview with Michael McKee and Tom Keene on Bloomberg Radio. “The S&P is a global index and we do pay attention to the world economy. Sometimes, I find myself sitting back and thinking ’Well, the S&P is 16.5, 17 times trailing earnings. Is the world serene enough to support that PE?”

Ukraine’s currency pared losses after weakening beyond 11 per dollar. International Monetary Fund Managing Director Christine Lagarde said in a statement that the IMF is ready to assess the country’s request for aid.

Currency Moves

Russia’s ruble slid 0.2 percent against the dollar. Brazil’s real advanced 1 percent after a report showed the economy grew in the fourth quarter more than economists forecast.

The yen gained against 10 of its 16 major counterparts. The euro advanced to $1.3709 as the Bloomberg Dollar Spot Index slipped for the third day in four.

The MSCI Emerging Markets Index rallied 0.9 percent as Ukraine’s benchmark gauge added 4.1 percent. Brazil’s gauge rallied 2.4 percent.

Investors are stepping up withdrawals from emerging-market exchange-traded funds and shifting into Europe as concern mounts that growth is faltering in developing nations.

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