US close: Dow Jones and S&P reach record highs after Yellen's speech
US stocks rallied on Tuesday, as the S&P 500 and Dow industrials hit record highs, after Federal Reserve Chairwoman Janet Yellen testified to the Congress.
The Dow Jones Industrial Average closed up 92.35 points at 18,209.19, while the S&P 500 and the Nasdaq rose 5.82 and 7.15 points respectively.
In her speech, Yellen told the Congress the Federal Reserve was making plans to drop the word “patient” from its statement.
"The Fed is clearly getting close to the first rate hike, which we expect in June," said Paul Ashworth, chief US economist at Capital Economics.
"Beyond that, we anticipate that rising wage and core price inflation will prompt the Fed to hike the fed funds rate to between 1.00% and 1.25% by end-2015 and 2.75% to 3.00% by end-2016."
Analysts at Barclays also believed the rate hike will be discussed at the Fed's meeting in March.
"We read Fed Chair Janet Yellen’s prepared testimony to the Senate as indicating the Fed is readying a change in its forward guidance, which we see coming at the March meeting," they said.
"We retain our call for a rate hike in June and look for the committee to alter the March statement by removing “patient” in favour of other language that suggests full data dependency."
US consumer confidence dropped to 96.4 in February, after reaching a seven-year high of 103.8 in January.
Meanwhile, activity in the US services sector bounced back in February, as new work at companies recovered from the prior month’s record low levels, the results of a survey showed.
Markit’s services sector purchasing managers’ index (PMI) for the month of February increased to a reading of 57 from the prior month’s print of 54.2.
Completing a heavy day in terms of economic data, the S&P/Case-Shiller composite index of home prices in 20 cities increased rose 4.5% year-on-year in December, exceeding expectations for a 4.3% rise.
In company news, Shake Shack rose 4.50% after a host of investment banks began covering the stock with the hold, neutral and buy ratings
Retail giant Home Depot rose 3.98% after reporting a 36% rise in fourth-quarter profit and said it would buy back $18bn of shares, despite warning that currency headwinds will impact 2015 earnings.
SunPower and First Solar jumped 18% and 10.21% respectively after saying late on Monday they planned an initial public offering for a pooled-asset spin-off.
Gold futures were down 0.05% to $1,200.20, while the dollar slipped marginally against the euro, the yen and the pound.
After a sharp drop on Monday which led to speculations of an OPEC emergency meeting, oil prices continued to fall, with Brent crude losing 0.44% to $58.64 a barrel, while West Texas Intermediate declined 0.75% and ended the session at $49.08 a barrel.
S&P 500 - Risers
First Solar Inc. (FSLR) $54.70 +10.19%
Expeditors International Of Washington Inc. (EXPD) $47.88 +5.29%
Peabody Energy Corp. (BTU) $7.84 +5.09%
Home Depot Inc. (HD) $116.75 +3.98%
United States Steel Corp. (X) $25.13 +3.50%
Freeport-McMoRan Inc (FCX) $21.22 +3.06%
CONSOL Energy Inc. (CNX) $34.34 +3.00%
Exelon Corp. (EXC) $34.79 +2.99%
Cabot Oil & Gas Corp. (COG) $28.40 +2.97%
Coach Inc. (COH) $42.95 +2.97%
S&P 500 - Fallers
Diamond Offshore Drilling Inc. (DO) $30.79 -8.42%
Windstream Holdings Inc (WIN) $7.86 -8.39%
Ensco Plc. (ESV) $26.97 -5.86%
ONEOK Inc. (OKE) $45.10 -4.89%
Wynn Resorts Ltd. (WYNN) $147.00 -4.75%
Noble Corporation plc (NE) $17.83 -4.29%
Rowan Companies plc (RDC) $22.94 -4.10%
Ventas Inc. (VTR) $74.54 -3.92%
HCP Inc. (HCP) $42.16 -3.59%
Macy's Inc. (M) $62.10 -3.21%
Dow Jones I.A - Risers
Home Depot Inc. (HD) $116.75 +3.98%
JP Morgan Chase & Co. (JPM) $60.82 +2.48%
Intel Corp. (INTC) $34.42 +1.95%
Caterpillar Inc. (CAT) $84.50 +1.21%
International Business Machines Corp. (IBM) $164.83 +1.18%
Goldman Sachs Group Inc. (GS) $192.22 +1.00%
Verizon Communications Inc. (VZ) $49.22 +0.92%
General Electric Co. (GE) $25.39 +0.87%
McDonald's Corp. (MCD) $94.98 +0.71%
American Express Co. (AXP) $80.86 +0.70%
Dow Jones I.A - Fallers
Unitedhealth Group Inc. (UNH) $115.43 -0.83%
Walt Disney Co. (DIS) $104.67 -0.30%
Boeing Co. (BA) $154.38 -0.23%
Visa Inc. (V) $272.47 -0.20%
Pfizer Inc. (PFE) $34.34 -0.15%
Microsoft Corp. (MSFT) $44.09 -0.14%
Wal-Mart Stores Inc. (WMT) $84.57 -0.04%
Nasdaq 100 - Risers
Expeditors International Of Washington Inc. (EXPD) $47.88 +5.29%
Xilinx Inc. (XLNX) $42.48 +2.88%
KLA-Tencor Corp. (KLAC) $66.27 +2.78%
Altera Corp. (ALTR) $36.80 +2.48%
Broadcom Corp. (BRCM) $45.31 +2.40%
Sirius XM Holdings Inc (SIRI) $3.91 +2.22%
Monster Beverage Corp (MNST) $124.81 +2.20%
Discovery Communications Inc. Class A (DISCA) $33.00 +2.06%
Intel Corp. (INTC) $34.42 +1.95%
Applied Materials Inc. (AMAT) $25.36 +1.81%
Nasdaq 100 - Fallers
Wynn Resorts Ltd. (WYNN) $147.00 -4.75%
Vodafone Group Plc ADS (VOD) $34.81 -3.25%
Vimpelcom Ltd Ads (VIP) $4.81 -2.83%
Seagate Technology Plc (STX) $60.70 -2.08%
Micron Technology Inc. (MU) $30.78 -1.97%
Western Digital Corp. (WDC) $108.97 -1.91%
Sandisk Corp. (SNDK) $79.97 -1.74%
Tesla Motors Inc (TSLA) $204.05 -1.58%
Sba Communications Corp. (SBAC) $117.81 -1.30%
Henry Schein Inc. (HSIC) $141.39 -1.13%