Technology firms lead broad gains for U.S. stocks; Dow reaches a new high
Technology companies led U.S. stocks higher Wednesday in a broad rally that helped nudge the Dow Jones industrial average to a new high.
In remarks before Congress, Federal Reserve Chair 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 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 smaller-company stocks picked up 11.27 points, or 0.8 percent, to 1,424.32.
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.
Oil prices wavered early Wednesday, but recovered following 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.