July 17, 2013 / 4:08 PM / 7 years ago

US STOCKS-Wall Street rises after Bernanke says policy flexible

* Yahoo at highest price since 2008

* Housing starts below expectations

* Indexes up: Dow 0.2 pct, S&P 0.2 pct, Nasdaq 0.2 pct

By Alison Griswold

NEW YORK, July 17 (Reuters) - U.S. stocks rose modestly on Wednesday after Federal Reserve Chairman Ben Bernanke said the central bank’s plan to start winding down its monetary stimulus later this year depended on the economy’s performance.

In his twice yearly report to Congress on monetary policy , Bernanke stayed near the timeline he first laid out last month, that the Fed’s bond-buying program would cease by mid-2014, though he stressed the plan was not set in stone.

Nine of the 10 S&P 500 industry sectors moved higher, led by gains in commodities and health shares. St. Jude Medical was one of the the S&P 500’s best performers after its profit topped expectations, adding 6.9 percent to $51.82.

Shares were off their highs but still positive after falling on Tuesday and snapping an eight-day string of gains for the S&P 500 index.

“Right off when his testimony came out we popped, and we seem to be drifting back up to the highs again,” said Dennis Dick, proprietary trader at Bright Trading LLC in Las Vegas.

“Whenever there’s trouble it seems like the Fed will come in and bail this market out. It’s hard to short this market.”

Financial markets have been sensitive to speculation over when the Fed will begin to scale back its $85 billion a month in bond purchases. Comments by Bernanke and minutes from a Fed meeting in late May triggered a nearly 6 percent drop in the S&P 500 in the month that followed.

But statements from Bernanke and other Fed officials in recent weeks have placated investors and erased those declines, with the S&P rallying to a record high on Monday.

The Dow Jones Industrial Average was up 24.08 points, or 0.16 percent, at 15,475.93. The Standard & Poor’s 500 Index was up 6.26 points, or 0.37 percent, at 1,682.52. The Nasdaq Composite Index was up 11.70 points, or 0.33 percent, at 3,610.20.

Yahoo Inc’s lackluster results failed to put off Wall Street analysts, who focused on its stake in the fast-growing Chinese e-commerce firm Alibaba and product development efforts. The company’s shares jumped 6.5 percent to trade at $28.63, their highest price since May 2008.

Financial stocks advanced, led by gains in Bank of America Corp, up 1.8 percent to $14.18, and BNY Mellon Corp , which rose 3.4 percent to $31.39, after they reported quarterly earnings.

The S&P financial sector gained 0.5 percent.

Economic data showed housing starts dropped 9.9 percent to a seasonally adjusted annual rate of 836,000 units, the lowest level since August last year and below the 959,000 forecast.

Other data on Wednesday will include the Fed’s Beige Book of regional economic conditions due at 2 p.m. (1800 GMT).

American Express fell 4.4 percent to $74.75 as the biggest drag on both the Dow and S&P 500 after the European Commission said it would propose a limit of 0.2 percent and 0.3 percent on the fees that banks charge to process debit card and credit card transactions.

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, data from Thomson Reuters showed.

Other S&P 500 companies scheduled to report earnings on Wednesday include eBay Inc, IBM and Intel Corp .

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below