Wall Street climbs on Bernanke, economic data
By Chuck Mikolajczak | February 28, 2013 5:21 AM EST
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.
Adding to the positive tone was economic data which showed a gauge of planned U.S. business spending in January recorded its largest increase in just over a year and contracts to buy new homes neared a three-year high last month.
Bernanke's remarks supporting the Fed's stance before a Senate panel 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.
"By and large you can track the turn in the market yesterday and today with Bernanke. He is just adamant," said Keith Bliss, senior vice-president at Cuttone & Co in New York.
"It doesn't matter what the Fed minutes tell you, he is going to keep refilling the punch bowl until we get unemployment down below 6 percent."
The S&P 500 had climbed 6 percent for the year and came within reach of all-time highs before the minutes from the Fed's January meeting were released last Wednesday and raised questions about whether the Fed may slow or halt its economy-stimulating measures soon.
An Italian bond auction that drew solid demand reassured investors after this week's inconclusive elections in Italy, which rekindled fears of a new euro zone debt crisis.
The Dow Jones industrial average <.DJI> gained 140.15 points, or 1.01 percent, to 14,040.28. The Standard & Poor's 500 Index <.SPX> climbed 16.80 points, or 1.12 percent, to 1,513.74. The Nasdaq Composite Index <.IXIC> advanced 38.18 points, or 1.22 percent, to 3,167.82.
In earnings news, discount retailer Target Corp
But Dollar Tree Inc
TJX Cos Inc
The S&P retail index <.SPXRT> climbed 1.6 percent.
With 93 percent of the S&P 500 companies having reported results so far, 69.5 percent beat profit expectations, compared with a 62 percent average since 1994 and 65 percent over the past four quarters, according to Thomson Reuters data.
Fourth-quarter earnings for S&P 500 companies are estimated to have risen 6.2 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.
(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)