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Overnight Markets: S&P 500 closes at record after Yellen's testimony

by Himanshu Singh on Feb 28, 2014 at 02:57

Overnight Markets: S&P 500 closes at record after Yellen's testimony

The Standard & Poor’s 500 Index rose to a record on Thursday and closed in positive territory for the year after Federal Reserve Chair Janet Yellen said the central bank may change its strategy for reducing asset purchases should the economy weaken.

The Dow Jones industrial average rose 74 points or 0.46%, to end at 16,273. The S&P 500 gained nine points or 0.49%, to finish at 1,854, surpassing its previous record closing high set on 15 January. The Nasdaq Composite added 27 points or 0.63%, to close at 4,319.

Investors were relieved after Yellen, testifying before the Senate Banking Committee,  said that heavy snowstorms and unusually cold weather - and not worsening fundamentals - were to blame for weak US employment, retail sales and other data.

She also said the Fed would watch carefully to make sure weather was indeed behind the recent weakness. But she added that it would take a "significant change" to the economy's prospects for the Fed to put plans to cut its bond-buying programme on hold.

Adding to the positive tone, economic data showed orders for long-lasting US manufactured goods excluding transportation, or durable goods excluding transportation, and a gauge of business spending unexpectedly increasing in January.

Some retailers scored sharp gains for a third session. Mylan Inc (MYL.O) shares shot up 9.4% after the US generic drugmaker gave a 2014 forecast above Wall Street's estimates.

After the bell, Gap Inc (GSP.N) shares slid 1% after the clothing retailer reported results. Shares of Deckers Outdoor Corp (DECK.O) tumbled 12.5% after the company, whose brands include UGG boots and Teva sandals, posted earnings.

During the regular session, J.C. Penney (JCP) shares surged 25.3%, a day after the US department store chain forecast more improvement in its comparable sales and gross profit margin this fiscal year.

In Asia, shares inched higher on Friday in morning trade ahead of tomorrow’s China manufacturing report and after the Fed said it may alter its stimulus-cut strategy should the economy weaken.

The MSCI Asia Pacific Index gained less than 0.1% to 138 as of 9:31 a.m. in Hong Kong. Japan’s Topix slipped 0.3% after reports showed the country’s industrial production in January beat estimates.

Australia’s S&P/ASX 200 Index was little changed. New Zealand’s NZX 50 Index was also little changed and South Korea’s Kospi index added 0.1%.

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