Upbeat Yellen lifts US stocks to another record
NEW YORK (AFP) – US stocks smashed records again Tuesday and the dollar advanced after Federal Reserve Chair Janet Yellen signalled higher interest rates are on the way.
Comments from the US central bank chief spurred US banking shares, helping all three major US stock indices to close at records for the fourth straight day.
That came on a muted session for European stocks, while Japan’s Nikkei retreated.
US stocks have been on a tear since President Donald Trump last week said he planned to unveil a tax-cut plan within the next two to three weeks.
The Standard & Poor’s 500 index rose 0.4 percent to 2,337.58 for its sixth straight day of gains. The Dow Jones industrial average rose 0.5 percent to 20,504.41. The Nasdaq composite rose 0.3 percent to 5,782.57.
That streak seemed to be at risk early in the session ahead of Yellen’s testimony.
Yellen presented an upbeat view of the economy in her testimony to Congress, noting labor market conditions continue to improve and inflation is inching up to the Fed’s two percent target.
She confirmed the next rate increase could come at any time, which leaves open the possibility of a move at the March 14-5 policy meeting.
“After sort of hesitating during Janet Yellen’s remarks, investors have decided that the situation is not too serious and have taken us to record highs again,’’ said Karl Haeling of Landesbank Baden-Wuerttemberg.
BK Asset Management managing director Kathy Lien said, “The tone of her semi-annual testimony was unambiguously positive and for that reason the US dollar, US stocks, and US rates moved sharply higher.’’
Peugeot SA shares rose 4.1 percent in Paris after the company said it was exploring a possible takeover of General Motors’ lossmaking European assets Opel and Vauxhall. GM, which confirmed the talks, jumped 4.8 percent.
Japan’s Toshiba slumped eight percent after it delayed releasing financial results expected to include billions of dollars in losses from its ailing US nuclear power unit.