* Yahoo’s stock jumps to highest intraday level since May 2008
* Bank of America shares climb after earnings
* American Express shares extend drop after the bell on results
* Intel and eBay shares slip, but IBM up in after-hours trading
* Dow up 0.1 pct, S&P 500 up 0.3 pct, Nasdaq up 0.3 pct
By Caroline Valetkevitch
NEW YORK, July 17 (Reuters) - U.S. stocks ended modestly higher on Wednesday after Federal Reserve Chairman Ben Bernanke said the timeline for winding down the U.S. central bank’s stimulus program was not set in stone.
Shares of Bank of America and Yahoo rose after the companies reported quarterly results. Both ranked among the names giving the biggest boost to the S&P 500.
The three major U.S. stock indexes bounced back from Tuesday’s lower close, which broke the S&P 500’s eight-day string of gains.
Bernanke said the U.S. central bank still expects to start scaling back its massive bond-buying program later this year, but he said the timeline depended on the economic outlook. He made the comments on Wednesday before the House Financial Services Committee as part of his twice-yearly report to Congress on monetary policy. On Thursday, he will appear before the Senate Banking Committee.
“He’s still being quite vague in describing exactly what to expect next, and I think that serves his purposes. He’s trying to minimize the impact of policy change on the markets,” said Lawrence Creatura, portfolio manager at Federated Investors in Rochester, New York.
Bernanke’s comments on May 22 triggered a drop of nearly 6 percent in the S&P 500 in the month that followed. But remarks from Bernanke and other Fed officials since then have calmed the market and erased those declines. The S&P 500 is just several points away from the all-time intraday high of 1,687.18 it reached on May 22. For the year, the S&P 500 is up 17.9 percent.
Yahoo shares shot up 10.3 percent to close at $29.66. Earlier, Yahoo hit an intraday high at $29.73, its highest level since May 2008. Instead of Yahoo’s bottom-line results, investors focused more on news of its stake in the fast-growing Chinese e-commerce firm Alibaba and its product development efforts.
The Dow Jones industrial average rose 18.67 points, or 0.12 percent, to end at 15,470.52. The Standard & Poor’s 500 Index gained 4.65 points, or 0.28 percent, to finish at 1,680.91. The Nasdaq Composite Index advanced 11.50 points, or 0.32 percent, to close at 3,610.00.
Bank of America shares gained 2.8 percent to $14.31, while BNY Mellon Corp shares rose 1.9 percent at $30.92. Both led the financial sector higher after the banks reported stronger-than-expected quarterly earnings. The S&P financial sector index advanced 0.5 percent.
“One reason investors might be encouraged by earnings is that management teams have done a great job of setting expectations, and right now, the bar is set at ankle height,” Creatura said. “So it should be reasonably easy for companies to beat expectations this quarter, and that could be a positive catalyst for markets.”
Analysts expect S&P 500 companies’ second-quarter earnings to have grown 3.3 percent from a year earlier, with revenue up 1.2 percent, Thomson Reuters data showed.
On the flip side, shares of American Express fell 1.9 percent to $76.80 after the European Commission said it would propose limits on fees that banks can charge to process debit-card and credit-card transactions. During the regular session, American Express was the Dow’s biggest percentage decliner.
After the bell, American Express shares slid 1 percent to $76 after the company reported results.
In other trading after the bell, shares of Intel fell 3.3 percent to $23.35 after the world’s biggest chipmaker cut its full-year revenue forecast and said it is scaling back capital spending.
Shares of eBay dropped 6.2 percent to $53.80 in extended-hours trading after the e-commerce company reported solid second-quarter results, but warned of “headwinds” in the second half of the year from Europe and Korea.
In contrast, shares of IBM rose almost 3 percent in extended-hours trading after IBM raised its full-year earnings forecast and reported second-quarterly earnings that beat estimates. During the regular session, IBM’s stock rose 0.4 percent to end at $194.55.
During the regular session, shares of DuPont jumped 5.3 percent to $57.25 after Trian Fund Management’s Nelson Peltz said he has amassed a “big stake” in the chemicals maker. The stock was the Dow’s top percentage gainer.
Part of the day’s upbeat tone came from the Federal Reserve’s Beige Book, which said the U.S. economy continued to grow at a modest to moderate pace in June and early July, with manufacturing expanding in most areas of the country.
Volume was roughly 5.7 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, below the average daily closing volume of about 6.4 billion this year. On Monday, volume hit its lowest for any full trading day this year.
Advancers outpaced decliners on the NYSE by a ratio of nearly 2 to 1 in Wednesday’s session. On the Nasdaq, about three stocks rose for every two that fell.