Dow Jones Trades Near Session Highs on Fed Chair Speech
The Dow Jones Industrial Average (DJIA) turned higher at noon on Tuesday as Federal Reserve Chairwoman Janet Yellen said the Fed still envisages a gradual pace of interest rate hikes in light of global pressures that could weigh on the U.S. economy.
Yellen was speaking during a news conference at the Economic Club of New York after the Federal Open Market Committee meeting in Washington.
She said it was too early to tell if the recent pickup in inflation would last.
Investors cheered Yellen’s message that the Fed would move slowly in lifting rates. The Dow Jones Industrial Average spiked as much as 0.5% to 17,622.91 before paring gains to 17,584.18, up 0.3%, at 1:03 p.m. in New York. The DJIA had opened lower to fall as much as 0.6%.
Two shares rose for every issue that declined in the 30-member measure. Microsoft Corporation (NASDAQ:MSFT) and Apple Inc. (NASDAQ:AAPL) were the largest advancers with a two percent gain.
The S&P 500 rose as much as 0.5% to 2,048.04, also reversing earlier losses. The tech heavy NASDAQ Composite, meanwhile, had turned higher before Yellen’s remarks and extended gains after the speech to as much as 1.2%.
In her first remarks after the Fed held steady on rates earlier this month, Yellen said global risks remained, including uncertainty over China’s economic growth and cheap oil prices.
Yellen did not specify a timetable for further hikes to follow the Fed’s interest-rate increase in December from all-time lows. She said the risks to the United States remain limited but cautioned that that assessment is subject to “considerable uncertainty.”
Yellen’s comments nudged down short-term Treasury yields to their lowest level in a month. The yield on the two-year Treasury retreated 6.7 basis points to 0.820%, its lowest level in a month. The 30-year Treasury yield surrendered 2.2 basis points to 2.635%, its lowest level in a month.
On the other hand, gold futures stretched gains as investors interpreted Yellen’s comments as a sign that a rate increase in April isn’t likely.
The gold price rallied as much as 1.6% to $1,242 a troy ounce before trimming gains to $1,237.00 a troy ounce, up 1.3%.
The U.S. Dollar Index, a gauge of the greenback against six currencies, skidded 0.7% to 95.32.
Apple Inc. (NASDAQ:AAPL) advanced to as high as 107.56. The world’s largest technology company no longer faces legal action from the Justice Department, after officials said succeed in hacking an iPhone belonging to one of the San Bernardino shooters without the company’s help.
In other equities, SunEdison Inc (NYSE:SUNE) crumbled 60% to $0.50, downwardly breaching the $1.00 barrier for the first time since the renewable energy company went public 21 years ago. SunEdison’s yieldco TerraForm Global Inc (NASDAQ:GLBL) said the filing of its annual report will be delayed beyond March 31, because of internal control weaknesses related to SunEdison’s management services.
Lennar Corporation (NYSE:LEN) rose as much as four percent to $48.59 as recovery in the U.S. home market helped the home builder to report another quarter of double-digit percentage increases in profit and sales.
Keryx Biopharmaceuticals (NASDAQ:KERX) surged 26% to $5.74 after the drug maker reported a successful late stage clinical trial for its drug to treat iron deficiency anemia in certain kidney disease patients.
McCormick & Company, Incorporated (NYSE:MKC) hit a new 52-week high of $99.90 after the spice maker reported a 32% jump in profit for its latest quarter and offered an upbeat revised earnings forecast for the year.
The Dow Jones Industrial Index is en route to end the month in positive territory, for the fourth time in the past six months. The gauge is up 0.9% this year after erasing all losses it incurred during the year’s first seven weeks.