US stocks closed higher on Tuesday, with the Dow Jones Industrial Average and S&P 500 hitting records, as investors attempted to interpret a subtle change in emphasis in testimony by US Federal Reserve Chair Janet Yellen.
Yellen told a US 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.
Photo: Reuters
“All the news at this point is incrementally good,” said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey. “It’s not enough to cause a significant rise at this point. The only thing that would give us a rise now would be earnings growth. In most industries, we’re not really seeing strong top-line growth.”
In New York trading on Tuesday, the Dow 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 10th 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 expected to be released in a week, Wells Capital Management chief investment officer Jim Paulsen said in Minneapolis.
“There just doesn’t seem to be big reaction by the US stock market,” Paulsen said. “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 last year above the 4.3 percent forecast and 4.3 percent in November last year.
Other data showed the US services sector expanded this month at its fastest pace since October last year, a preliminary reading from financial data firm Markit said.
However, US consumer confidence fell more than expected this month, according to the Conference Board.
Home Depot Inc shares gained 3.98 percent, boosting the S&P 500 and the Dow. The home improvement retailer reported better-than-expected quarterly same-store sales and announced an US$18 billion share buyback program.
JPMorgan Chase & Co climbed 2.5 percent. The bank told investors it aims to save about US$1.4 billion in annual expenses. It also forecast about 10 percent core loan growth this year.
Toll Brothers Co rose 3.9 percent, helping to lift the Philadelphia Stock Exchange Housing Sector Index. The largest US 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 US exchanges, below the 6.9 billion month-to-date average, according to BATS Global Markets.
Advancing firms outnumbered decliners on the New York Stock Exchange 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.
ADVANCED: Previously, Taiwanese chip companies were restricted from building overseas fabs with technology less than two generations behind domestic factories Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp, would no longer be restricted from investing in next-generation 2-nanometer chip production in the US, the Ministry of Economic Affairs said yesterday. However, the ministry added that the world’s biggest contract chipmaker would not be making any reckless decisions, given the weight of its up to US$30 billion investment. To safeguard Taiwan’s chip technology advantages, the government has barred local chipmakers from making chips using more advanced technologies at their overseas factories, in China particularly. Chipmakers were previously only allowed to produce chips using less advanced technologies, specifically
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
VERTICAL INTEGRATION: The US fabless company’s acquisition of the data center manufacturer would not affect market competition, the Fair Trade Commission said The Fair Trade Commission has approved Advanced Micro Devices Inc’s (AMD) bid to fully acquire ZT International Group Inc for US$4.9 billion, saying it would not hamper market competition. As AMD is a fabless company that designs central processing units (CPUs) used in consumer electronics and servers, while ZT is a data center manufacturer, the vertical integration would not affect market competition, the commission said in a statement yesterday. ZT counts hyperscalers such as Microsoft Corp, Amazon.com Inc and Google among its major clients and plays a minor role in deciding the specifications of data centers, given the strong bargaining power of
TARIFF SURGE: The strong performance could be attributed to the growing artificial intelligence device market and mass orders ahead of potential US tariffs, analysts said The combined revenue of companies listed on the Taiwan Stock Exchange and the Taipei Exchange for the whole of last year totaled NT$44.66 trillion (US$1.35 trillion), up 12.8 percent year-on-year and hit a record high, data compiled by investment consulting firm CMoney showed on Saturday. The result came after listed firms reported a 23.92 percent annual increase in combined revenue for last month at NT$4.1 trillion, the second-highest for the month of December on record, and posted a 15.63 percent rise in combined revenue for the December quarter at NT$12.25 billion, the highest quarterly figure ever, the data showed. Analysts attributed the
RSS