Wall Street rises on Bernanke, Italian bond auction
By Angela Moon | February 28, 2013 3:42 AM EST
Wall Street rose on Wednesday as Federal Reserve Chairman Ben Bernanke reaffirmed his support of the Fed's stimulus policy, the latest U.S. earnings showed strength and an Italian bond auction drew ample demand, reassuring investors.
In his second day before a congressional committee, Bernanke repeated testimony in which he defended the Fed's policy of buying bonds to keep interest rates low in order to promote growth and bring down the unemployment rate.
Bernanke's similar remarks on Tuesday helped the market rebound from its worst decline since November. The S&P 500 <.SPX> is now back above 1,500, a closely watched level that has been technical support until recently.
"Bernanke comments will keep liquidity in place in the market and every dip now is being viewed as an opportunity to get in," said Dan Veru, chief investment officer at Palisade Capital Management.
Financial markets had been worried about the possibility the Fed would end its bond buying earlier than expected after Fed meeting minutes showed some policymakers favored changes.
Also supporting the market, European stocks and the euro rose on relief that Italy was able to sell bonds despite jitters about the country's political instability.
The Dow Jones industrial average <.DJI> rose 96.77 points, or 0.70 percent, at 13,996.90. The Standard & Poor's 500 Index <.SPX> gained 11.93 points, or 0.80 percent, at 1,508.87. The Nasdaq Composite Index <.IXIC> advanced 30.75 points, or 0.98 percent, at 3,160.39.
The benchmark S&P 500, up 6 percent for the year, was within reach of record highs a week ago, before the minutes from the Fed's January meeting were released. Since then, the index has shed 1 percent as the minutes raised questions about whether the Fed may slow or halt its economy-stimulating measures soon.
In earnings news, discount retailer Target Corp
Dollar Tree Inc
Shares of Boyd Gaming
A closely watched proxy for business spending plans jumped 6.3 percent in January, the biggest gain since December 2011, data on durable goods orders showed on Wednesday.
Another report showed an index of pending home sales increased 4.5 percent to its highest level since April 2010 - just before the expiration of the home-buyer tax credit.
(Editing by Bernadette Baum)
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