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Overnight Markets: US stocks extend rally on debt ceiling relief

by Himanshu Singh on Feb 12, 2014 at 02:54

Overnight Markets: US stocks extend rally on debt ceiling relief

US stocks gained on Tuesday, with the benchmark indexes rising for a fourth straight session, as Congress agreed to advance legislation extending US borrowing authority and comments by Federal Reserve Chairman Janet Yellen fuelled bets the economy is strong enough to withstand further stimulus cuts.

The Dow Jones industrial average surged 193 points, or 1.22%, to end at 15,995. The Standard & Poor's 500 Index gained 20 points, or 1.11%, to finish at 1,820. The Nasdaq Composite Index climbed 43 points, or 1.03%, to close at 4,191.

The US House of Representatives yesterday agreed to advance legislation increasing Washington's borrowing authority, removing a potential market headwind.

Meanwhile, in her testimony on Tuesday, Yellen emphasised continuity in the US central bank's policy strategy of cutting asset purchases by $10 billion a month.

She also said that while the US unemployment rate has fallen recently, labour market conditions needed to improve further.

In corporate news, Sprint Corp (S.N) added 2.7% after the company reported quarterly revenue ahead of analysts' expectations and said it added wireless subscribers in the fourth quarter.

CVS Caremark Corp (CVS.N) shares surged 2.7% after the company posted higher quarterly profit as it processed more prescriptions.

On the downside, the shares of both Dean Foods Co (DF.N) and ConAgra Foods (CAG.N) declined after the companies gave weak outlooks. Dean's stock slid 7.4%, while ConAgra's stock lost 6.3%.

After the market closed, shares of Fossil Group Inc (FOSL.O) added 5% after the watch and accessories company reported fourth-quarter results, while TripAdvisor Inc (TRIP.O) shares gained 1% after the travel website company's results.

Infloblox Inc (BLOX.N) shares plunged 48.1% after the network equipment maker estimated second-quarter revenue below analysts' average forecast.

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