U.S. stocks closed higher on Tuesday, with the Dow and S&P 500 hitting records, as investors attempted to interpret a subtle change in emphasis in testimony by Federal Reserve Chair Janet Yellen.
Yellen told a congressional committee that the Fed is preparing to consider increases "on a meeting-by-meeting basis." While economists have been expecting a hike as soon as June, some investors saw Yellen's comments as an indicator of a later liftoff for the Fed's first rate hike since 2006.
"Yellen sounded cautious about the possibility of lifting rates too soon, given the weakness she sees in labor markets," Rob Williams, deputy editor of NewsmaxFinance, said on "The Steve Malzberg Show" on Newsmax.TV. "Stocks reacted with small gains in very low trading volume."
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The Dow Jones industrial average rose 92.35 points, or 0.51 percent, to 18,209.19, the S&P 500 gained 5.82 points, or 0.28 percent, to 2,115.48 and the Nasdaq Composite added 7.15 points, or 0.14 percent, to 4,968.12.
The Nasdaq rose for the tenth straight session, its longest streak since July 2009.
Equity investors did not react dramatically as they are likely more focused on economic indicators such as jobs data due out in a week, said Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis.
"There just doesn't seem to be big reaction by the U.S. stock market," said Paulsen. "The market may be more focused on the Fed's boss — the economy — than on the Fed itself."
The S&P/Case Shiller composite index of home prices in 20 metropolitan areas gained 4.5 percent in December above the 4.3 percent forecast and 4.3 percent in November.
Other data showed the U.S. services sector expanded in February at its fastest pace since October, according to a preliminary reading from financial data firm Markit. But U.S. consumer confidence fell more than expected in February, according to the Conference Board.
Home Depot shares gained 3.98 percent, boosting the S&P 500 and the Dow. The home improvement retailer reported a better-than-expected quarterly same-store sales and announced an $18 billion share buyback program.
JPMorgan Chase climbed 2.5 percent. The bank told investors it aims to save about $1.4 billion in annual expenses. It also forecast about 10 percent core loan growth in 2015.
Toll Brothers rose 3.9 percent, helping to lift the PHLX housing index. The largest U.S. luxury homebuilder reported a higher-than-expected quarterly profit and raised the low end of its full-year home delivery forecast.
About 5.9 billion shares changed hands on U.S. exchanges, below the 6.9 billion month-to-date average, according to BATS Global Markets.
Advancers outnumbered decliners on the NYSE by 1,897 to 1,176, for a 1.61-to-1 ratio; on the Nasdaq, 1,576 issues rose and 1,147 fell, a 1.37-to-1 ratio.
The S&P 500 posted 73 new 52-week highs and no new lows; the Nasdaq Composite recorded 132 new highs and 26 new lows.
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