* Fed chief reaffirms support for easy monetary policy
* U.S. business spending plans gauge hits one-year high
* Italian bond auction draws ample demand, reassuring
* Indexes: Dow up 1 pct; S&P up 1.1 pct; Nasdaq up 1.2 pct
By Chuck Mikolajczak
NEW YORK, Feb 27 U.S. stocks rose 1 percent on
Wednesday as Federal Reserve Chairman Ben Bernanke remained
steadfast in his support of the Fed's stimulus policy and data
pointed to economic improvement.
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 is now back above
1,500, a closely watched level that has been technical support
"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 gained 140.15
points, or 1.01 percent, to 14,040.28. The Standard & Poor's 500
Index climbed 16.80 points, or 1.12 percent, to 1,513.74.
The Nasdaq Composite Index advanced 38.18 points, or
1.22 percent, to 3,167.82.
In earnings news, discount retailer Target Corp
appeared poised for a solid showing in the first quarter and
forecast a higher profit for the full year after a weak
performance in the key holiday season. The stock dipped 1
percent to $63.44.
But Dollar Tree Inc jumped 12.5 percent to $46.21
after reporting a higher quarterly profit as shoppers spent more
and the chain controlled costs.
TJX Cos Inc advanced 1.7 percent to $44.40 after the
owner of the low-price T.J. Maxx and Marshalls chains posted
higher fourth-quarter results and said it plans to expand its
chains abroad and domestically this year and introduce
The S&P retail index 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.