US stocks score modest gains after Bernanke testimony
NEW YORK CITY—US stocks Wednesday rose after Federal Reserve Chairman Ben Bernanke said the Fed’s policy on tapering its bond-buying program was not on a “preset course.”
The Dow Jones Industrial Average added 18.67 (0.12 percent) at 15,470.52.
The broad-based S&P 500 put on 4.65 (0.28 percent) at 1,680.91 while the tech-rich Nasdaq Composite Index increased 11.50 (0.32 percent) to 3,610.00.
The gains came after Bernanke reiterated, in testimony to a House of Representatives committee, that the Fed would likely scale back the bond-buying program later this year, but only if the economy improves.
“I emphasize that, because our asset purchases depend on economic and financial developments, they are by no means on a preset course,” Bernanke told the lawmakers.
The market’s leading indices traded in a narrow band during and after the testimony, reflecting that Bernanke’s testimony yielded no major surprises, analysts said.
“It’s more of the same,” said Bill Lynch, director of investments at Hinsdale Associates. Bernanke is “pretty much repeating the same thing as last week.”
Bank of America gained 2.8 percent after reporting a 70 percent rise in adjusted second-quarter net income and beating analyst estimates by 7 cents at 32 cents per share.
Yahoo! surged 10.3 percent despite a mixed earnings report. While second-quarter profit rose 46 percent, the Internet portal company saw search ad revenue fall 5 percent. The company also downgraded its revenues outlook for the third quarter and the full year.
Toymaker Mattel sank 6.8 percent after reporting that quarterly profits fell 24 percent compared with the year-ago period. North American gross sales fell 2 percent.
California utility Pacific Gas and Electric Company dropped 2.7 percent after the California Public Utilities Commission proposed a $300 million fine related to a fatal 2010 pipeline explosion.
Dow component DuPont jumped 5.3 percent after media reports said Trian Fund Management’s Nelson Peltz had taken a big stake in the chemicals company.
Another Dow member, Caterpillar, tumbled 1.7 percent after hedge fund investor Jim Chanos reportedly warned that the big industrial company would suffer from a slowdown in Chinese commodities demand.
Bond prices rose. The yield on the 10-year US Treasury fell to 2.49 percent from 2.53 percent late Tuesday, while the 30-year slipped to 3.57 percent from 3.58 percent. Bond prices and yields move inversely.