US stocks rise ahead of Bernanke testimony
Charles Boeddinghaus works at his post on the floor of the New York Stock Exchange In this May 7, 2013, photo. US stocks closed higher Tuesday, May 21, 2013, after a strong earnings report from Home Depot and as the market anticipates Wednesday’s testimony in Congress by Federal Reserve Chairman Ben Bernanke. AP/RICHARD DREW
NEW YORK—US stocks closed higher Tuesday after a strong earnings report from Home Depot and as the market anticipates Wednesday’s testimony in Congress by Federal Reserve Chairman Ben Bernanke.
The Dow Jones Industrial Average finished up 52.30 (0.34 percent) at 15,387.58.
The broad-based S&P 500 added 2.87 (0.17 percent) at 1,669.16, while the tech-rich Nasdaq Composite Index increased 5.69 (0.16 percent) to 3,502.12.
Bernanke will be watched on Wednesday for signs that the Fed might be ready to alter its quantitative easing (QE) policy, or project just when and how it might reel in its aggressive bond purchases.
FTN Financial’s Chris Low expects a status-quo update.
“I think he will argue that QE is effective policy, that it is bearing fruits, but I don’t think he is going to tip his hands in terms of what will happen next with QE, whether they will make it bigger or smaller,” Low said.
Pharmaceutical firm Merck led the Dow gainers with a 4.7 percent rise on heavy volume, with no clear reason behind it.
Home Depot rose 2.5 percent to $78.71 after its first-quarter earnings came in at 83 cents per share, compared with expectations of 77 cents. The company boosted its full-year profit forecast, citing the housing recovery.
Apple lost 0.7 percent as chief executive Tim Cook was grilled in Congress over the company’s use of offshore loopholes to avoid paying taxes on tens of billions of dollars in profits.
Luxury retailer Saks rose 11.3 percent after reporting strong 5.9 percent sales growth for the first quarter, handily beating forecasts of 2.2 percent.
The shares soared another 19 percent after hours following a newspaper report that the company was seeking a buyer.
JPMorgan Chase added 1.4 percent after chief executive Jamie Dimon beat back a shareholder challenge to his retaining the chairman’s post in the wake of the London Whale trading losses.
Cruise company Carnival Corp. dropped 4.3 percent after slashing profit forecasts due to increased voyage cancellations and increased selling and administrative costs.
Bond prices rose. The yield on the 10-year US Treasury fell 1.94 percent from 1.96 percent late Monday, while the 30-year edged fell to 3.15 percent from 3.17 percent. Bond prices move inversely to yields.
