Dow hits new high as stocks gain

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM - ALEX VEIGA

Tech­nol­ogy com­pa­nies again led U.S. stocks higher Wed­nes­day in a broad rally that helped nudge the Dow Jones in­dus­trial av­er­age to a new high.

The Stan­dard & Poor’s 500 in­dex gained 17.72 points, or 0.7 per­cent, to 2,443.25. The Dow rose 123.07 points, or 0.6 per­cent, to 21,532.14, a record high. The av­er­age, which had been up more than 171 points, last set a record high on June 19.

The Nas­daq com­pos­ite added 67.87 points, or 1.1 per­cent, to 6,261.17. The Rus­sell 2000 in­dex of small­er­com­pany stocks picked up 11.27 points, or 0.8 per­cent, to 1,424.32.

In re­marks be­fore Congress, Fed­eral Re­serve Chair­man Janet Yellen raised the pos­si­bil­ity that the cen­tral bank would con­sider slow­ing the pace of its in­ter­est-rate in­creases if in­fla­tion re­mained per­sis­tently be­low its tar­get level.

The move as­suaged con­cerns among some traders wor­ried that the Fed has been mov­ing too quickly to raise in­ter­est rates de­spite a slow­down in in­fla­tion and the U.S. econ­omy’s slug­gish growth of just 1.4 per­cent in the first quar­ter.

Yellen’s re­marks put in­vestors in a buy­ing mood and sent bond yields lower, stok­ing de­mand for real es­tate com­pa­nies, util­i­ties and other high-div­i­dend pay­ing stocks. Ma­te­ri­als com­pa­nies also posted hefty gains.

“In­vestors would pre­fer lower in­ter­est rates, par­tic­u­larly if the econ­omy isn’t gain­ing the kind of trac­tion

that would war­rant a faster rate-hike path,” said Quincy Krosby, chief mar­ket strate­gist at Pru­den­tial Fi­nan­cial. “This is pos­i­tive for the mar­kets.”

The stock mar­ket looked poised for a big move early on, climb­ing in pre­mar­ket trad­ing as in­vestors be­gan to size up Yellen’s pre­pared re­marks, which were re­leased ahead of her tes­ti­mony.

The in­dexes opened higher across the board and stayed in the green the rest of the day. All 11 sec­tors in the S&P 500 in­dex notched gains.

In her semi­an­nual tes­ti­mony be­fore the House Fi­nan­cial Ser­vices Com­mit­tee, Yellen said the cen­tral bank ex­pects to keep rais­ing a key in­ter­est rate at a grad­ual pace, and raised the pos­si­bil­ity that the

pace of rate in­creases would be slower than pre­vi­ously ex­pected should in­fla­tion re­main be­low its tar­get level of 2 per­cent an­nual growth.

The yield on the 10-year Trea­sury note fell to 2.32 per­cent from 2.37 per­cent late Tues­day. Yields af­fect rates on mort­gages and other con­sumer loans.

Tech­nol­ogy com­pa­nies led the mar­ket higher. PayPal gained $1.79, or 3.3 per­cent, to $56.55. Nvidia rose $6.63, or 4.3 per­cent, to $162.51. Ac­tivi­sion Bl­iz­zard added $3.04, or 5.2 per­cent, to $61.02.

Real es­tate in­vest­ment trusts and other high-div­i­dend pay­ing stocks ben­e­fited from ris­ing bond prices, which pulled bond yields lower. Crown Cas­tle In­ter­na­tional rose $1.76, or 1.8 per­cent,

to $ 100.05. Amer­i­can Tower climbed $2.95, or 2.3 per­cent, to $133.88.

NRG En­ergy was the big­gest gainer in the S&P 500. It soared 29.4 per­cent af­ter the com­pany said it plans to raise up to $4 bil­lion through as­set sales in or­der to lower its debt. The stock climbed $4.79 to $21.09.

Oil prices wa­vered early Wed­nes­day, but re­cov­ered af­ter a re­port show­ing that U.S. crude-oil in­ven­to­ries de­clined sharply last week.

Bench­mark U. S. crude rose 45 cents, or 1 per­cent, to set­tle at $45.49 per bar­rel on the New York Mer­can­tile Ex­change. Brent crude, used to price in­ter­na­tional oils, gained 22 cents, or 0.5 per­cent, to close at $47.74 per bar­rel in London.

AP/RICHARD DREW

Spe­cial­ist Thomas McAr­dle (cen­ter) works with traders Wed­nes­day at his post on the floor of the New York Stock Ex­change.

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