By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks extended their four-day
winning streak, ending Tuesday with solid gains as Federal Reserve
Chairwoman Janet Yellen pledged to keep interest rates low and to
continue to taper the pace of bond purchases if the economy keeps
improving.
The S&P 500 index (SPX) closed up 19.91 points, or 1.1% at
1,819.75, its best gain over four straight days since Dec. 23,
2011. The Dow Jones Industrial Average (DJI) closed up 192.98
points, or 1.2%, at 15,994.77 after briefly topping 16,000. The
3.6% gain over the past four days was the best four-day streak
since June 8, 2012.
The Nasdaq Composite (RIXF) ended the day 42.87 points, or 1%,
higher at 4,191.04. The tech-heavy index turned positive for 2014
and is now up 0.3% so far this year. Read the recap of our stock
market live blog.
Yellen said the Fed will continue to follow its
low-interest-rate policy course during a hearing before the House
Financial Services Committee. "Let me emphasize that I expect a
great deal of continuity in the Federal Open Market Committee's
approach to monetary policy," she said.
On Thursday, she will testify before the Senate Banking
Committee. Follow live blog of Janet Yellen's testimony before
Congress.
"The fact that Yellen will continue with tapering gives
investors confidence that the weather issues are transitory and
problems in the emerging markets are not big enough to drag the
U.S. toward a recession," said Phil Orlando, chief equity market
strategist at Federated Investors.
"After the selloff in the markets which began in mid-January and
until early February, Treasuries and Vix were overbought and
equities were oversold. Once the emerging markets fears subsided
and collective economic data were generally strong, money began to
flow into the stocks and markets bounced off," Orlando said.
"We believe the near 6% drop in the S&P 500 and 8% drop in
the Russell 2000 were healthy and are now over. However, we may see
more such pullbacks during the year," he added.
There were several other economic reports released on Tuesday. A
gauge of optimism among small businesses ticked up in January, led
by sales expectations and hiring plans. U.S. wholesale inventories
and wholesale sales in December also ticked up. Job openings at
U.S. workplaces ticked down to 3.99 million in December from 4.03
million in November.
In corporate news, Sprint shares (S) rose 2.7% after the company
reported a narrower loss for the fourth quarter.
CVS Caremark Corp. (CVS) shares rose 2.7% after the drugstore
chain posted a rise in profit and adjusted earnings beat estimates.
Chief Executive Larry Merlo calling the results "somewhat atypical"
as they were boosted by Medicare and the timing of generics.
Rackspace Hosting Inc. (RAX) slid 19% after posting a 30% drop
in profit late Monday, as higher costs more than offset growth in
revenue. It also said Chief Executive Lanham Napier would
retire.
Shares in DSW Inc. (DSW) rallied 3.8% on Tuesday after the
company narrowed its full-year adjusted earnings guidance as
fourth-quarter same-store sales came in flat. It also announced
Chief Financial Officer Douglas Probst will retire May 1.
WPX Energy (WPX) late Monday said its fourth-quarter and
full-year earnings will be impacted by up to $1.4 billion in pretax
charge stemming from a drop in forward market natural gas prices.
WPX shares slumped 10%, the biggest loser in the S&P 500.
ConAgra Foods Inc. (CAG) shares fell 6.3% after the food company
said Tuesday it cut its view for fiscal year 2014.
In other markets, European stocks rose for a fifth straight day,
while shares in Hong Kong rallied and Tokyo was shut for a holiday.
Gold pushed a win streak toward a fifth session, while oil rose and
the dollar fell against the British pound and Australian
dollar.
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