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Overnight Markets: Bernanke comments boost Wall Street

by Himanshu Singh on Feb 27, 2013 at 03:38

Overnight Markets: Bernanke comments boost Wall Street

Wall Street rebounded on Tuesday after Federal Reserve Chairman Ben Bernanke defended the central bank’s bond-buying stimulus and amid better-than-estimated housing and consumer confidence data.

The Dow Jones industrial average gained 116 points, or 0.84%, to 13,900 at the close. The Standard & Poor's 500 Index rose nine points, or 0.61%, to 1,497. The Nasdaq Composite Index advanced 13 points, or 0.43%, to close at 3,130.

Bernanke strongly defended the Fed's bond-buying stimulus programme in testimony on Tuesday before the Senate Banking Committee, silencing rumours that the central bank may pull back from its stimulative policy measures.

The comments helped ease investors' concerns about a stalemate in Italy after a general election failed to give any party a parliamentary majority.

Meanwhile, economic reports showed that US home prices increased more than expected in December, according to the S&P/Case-Shiller index. Consumer confidence rebounded in February, jumping more than expected, and new-home sales rose to their highest in four and half years in January.

Homebuilders and other consumer stocks gained, with Home Depot jumping 5.7% after reporting adjusted earnings and sales that beat expectations. PulteGroup gained 5.7%, while KB Home increased 7.2%.

Macy's shares gained 2.8% after the department-store chain stated it expects full-year earnings to be above analysts' forecasts because of strong holiday sales.

Elsewhere, Apple added 1.4%, while SanDisk Corp. gained 2.2% after the maker of flash memory for mobile devices was raised to outperform, which is the equivalent of buy, at RBC Capital Markets.

In the financial sector, JP Morgan lost 0.2% as the biggest US bank plans to reduce headcount by as many as 19,000 people in its mortgage and community banking businesses.

AMC Networks Inc. slumped 3.6% after the cable- network company’s fourth-quarter earnings missed analysts’ estimates.

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