- Donald Rumsfeld has ‘no idea’ if he paid taxes correctly
- Bradley Manning named honorary grand marshal of San Francisco Pride parade
- Look out PayPal: Facebook working toward mobile payments system
- U.S. rebukes Iran’s U.N. envoy pick over 1979 embassy attack
- Stoned mom avoids jail after driving 12 miles with baby on roof
- More than 100 ‘inappropriate’ encounters between NYC school staffers, students since 2009: report
- Joe Biden to Boston bombing survivors: ‘America will never, ever stand down’
- FBI failed to throughly vet Boston bombing suspect after Russian lead, report finds
- Atlanta Braves flooded with Hank Aaron hate mail: He’s a ‘scumbag’
- University: Help, our campus is too white
Stocks edge up as Fed Chairman Ben Bernanke reassures on stimulus
NEW YORK (AP) — Stocks edged higher in midday trading Wednesday after several major companies reported earnings gains and Federal Reserve Chairman Ben S. Bernanke said the central bank had no firm timetable for cutting back on its bond purchases.
Mr. Bernanke said the bank would consider reducing its stimulus program if the economy improves, but he emphasized that the reductions were “by no means on a preset course,” according to a prepared text of his testimony before Congress, which began Wednesday morning.
The central bank currently is buying $85 billion of bonds a month to keep interest rates low and encourage borrowing. Concerns that the Fed was poised to start easing back on that stimulus before the economy had recovered sufficiently caused the stock market to pull back in June.
“The market is responding well” to Mr. Bernanke’s comments, said Phil Orlando, chief market strategist at Federated Investors. The concern has been that “the Fed was going to dial the (stimulus) down to zero regardless how the economy was doing.”
The Standard & Poor’s 500 index climbed six points, or 0.4 percent, to 1,682. The Nasdaq composite rose 13 points, or 0.4 percent, to 3,611.
The Dow Jones industrial average rose 24 points, just 0.1 percent, to 15,476. The index was held back by American Express. The credit card company’s stock slumped $1.67, or 2.2 percent, to $76.63 after European regulators proposed to cap the lucrative processing fees the card company imposes.
Mr. Bernanke’s comments had a bigger impact on the Treasury market.
The yield on the 10-year Treasury note fell after Mr. Bernanke’s comments as investors bought U.S. government bonds. The yield fell to 2.48 percent from 2.53 percent on Tuesday. The yield has been gradually declining since July 5, when it surged to 2.74 percent after the government reported that hiring was strong in June.
If Treasury yields rise too fast, stock investors worry because of the impact that rising interest rates have on the wider economy. Higher mortgage rates, for example, would slow demand for homes.
Homebuilder stocks climbed Wednesday as the yield on Treasury notes fell. The group started the trading day lower after a government report showed that U.S. builders started work on fewer homes in June. Construction fell to an annual rate of 836,000 homes, the Commerce Department said Wednesday, 10 percent below May’s total of 928,000.
PulteGroup rose 40 cents, or 2.1 percent, to $19.68. D.R. Horton gained 49 cents, or 2.3 percent, to $22.20.
The stock market has climbed back to record levels in July following its brief slump in June, when the S&P 500 logged its first monthly decline since October on concern that the Federal Reserve would ease back on its economic stimulus too quickly. The S&P 500 has gained 4.7 percent in July, and the Dow is 3.8 percent higher.
Investors also are keeping an eye on company earnings during one of the busiest weeks for second-quarter profit reports.
Bank of New York Mellon gained 85 cents, or 2.9 percent, to $31.23, after the bank posted earnings that beat analysts’ expectations. The lender said its net income surged in the second quarter as market conditions improved and it collected more fees for managing investments.
Bank of America rose 16 cents, or 1.2 percent, to $14.08 after it, too, reported surging earnings for the period, helped by cost-cutting and investment banking gains.
TWT Video Picks
By returning to goodness, the nation can achieve greatness once again
- Fuel-filled wings, ability to swarm: Pentagon offers glimpse at future of drone fleet
- Secret U.S. assessments show Afghanistan not ready to govern on own
- U.S. military on high alert as Ukraine troops trade gunfire with pro-Russian militants
- Russian fighter jet buzzes U.S. Navy destroyer in Black Sea
- U.S. Navy to turn seawater into jet fuel
- Kirsten Dunst: Actress sparks feminist ire: 'You need a man to be a man'
- U.S. pilot scares off Iranians with 'Top Gun'-worthy stunt: 'You really ought to go home'
- WEBER: Obamacare cuts home healthcare for millions of seniors
- PHILLIPS: What did Harry Reid know and when did he know it?
- Nevada Bundy ranch standoff could leave dirt on Harry Reid reputation
Celebrity deaths in 2014
Top 10 handguns in the U.S.
Chaos as Manhattan building explodes