By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks posted tepid gains
Wednesday, with the S&P 500 up for a ninth session in ten after
Federal Reserve Chairman Ben Bernanke said the rate of bond
purchases is flexible.
The S&P 500 (SPX) rose 4.65 points, or 0.3%, to 1,680.91,
with materials pacing sector gains and utilities the only laggard.
The Nasdaq Composite (RIXF) gained 11.50 points, or 0.3%, to
3,610.
In testimony on Capitol Hill, Bernanke said the Fed's $85
billion in monthly bond buys are "by no means on a preset course"
and can be curbed further or extended, depending on the economic
climate. The central bank's stimulus program is meant to keep
interest rates down and encourage borrowing.
Bernanke's comments reinforce "what we already know: that the
Fed is looking at the broad economy, which is showing signs of
improvement," said Terry Sandven, chief equities strategist at U.S.
Bank Wealth Management.
U.S. equities are in a holding pattern as the market digests
recent gains, with the pattern likely to persist for another couple
of weeks as "we await further guidance from companies and from the
Fed," said Sandven, who added that investors will likely learn more
about the "timing of the tapering," or reduced Fed asset purchases,
at the next Federal Open Market Committee meeting at the end of the
month.
The S&P 500 and the Dow Jones Industrial Average (DJI) rose
to record closing highs on Monday, but ended lower on Tuesday.
On Wednesday, the blue-chip Dow industrials gained 18.67 points,
or 0.1%, to 15,470.52, with DuPont (DD) leading gains.
DuPont's shares rallied 5.3% after CNBC's Andrew Ross Sorkin
reported that Nelson Peltz's Trian Fund Management LP has acquired
a large stake in the chemicals firm. Asked by Sorkin about the
stake at the Delivering Alpha conference on Wednesday, Peltz
declined to comment.
Also in the Dow, shares of Bank of America Corp. (BAC) climbed
2.8% after the bank said second-quarter profit jumped 63%, beating
analyst estimates.
American Express Co. (AXP) was the top decliner in the Dow,
falling 1.9% after the Financial Times cited a draft plan in
reporting the European Commission had proposed the introduction of
a 0.2% cap on debit-and-credit-card transaction fees.
Dow component Caterpillar Inc. (CAT) dropped 1.7% after Jim
Chanos of Kynikos Associates said he is shorting the stock. Chanos,
speaking at the Delivering Alpha conference, said that even though
Caterpillar is a major U.S. company, it is facing "super commodity
headwinds." Check out MarketWatch's live blog of the Delivering
Alpha conference.
On the New York Stock Exchange, more than 676 million shares
traded. Composite volume topped 3.1 billion.
"The stock market has had a bit of a run here, so we may need to
do some trading in a range given the strong gains we had in the
spring," said Bruce McCain, chief investment strategist at Key
Private Bank.
"A lot of investors are focusing money on the United States, but
if we don't get some help from overseas markets, it'll be hard to
meet or beat growth estimates for U.S. firms as well," said
McCain.
Stocks mostly stayed in positive terrain as Bernanke answered
questions from members of the House Financial Services Committee,
and then as the Fed's so-called Beige Book found the economy
continued to grow at a "modest to moderate" pace.
Separately, construction on new homes fell in June, the
government said.
"Most are resigned to the fact that quantitative easing is going
away, so we need to see a transition to enthusiasm about the
economy and earnings growth," said McCain at Key Private Bank.
Shares of Dell Inc. (DELL) fell 1.1% ahead of a Thursday
shareholder vote on a bid by founder and CEO Michael Dell to take
the PC maker private.
Intel Corp. (INTC) lost 0.4% ahead of the chip maker's quarterly
results, due to be released after Wednesday's close.
Also due to report quarterly results after the market close on
Wednesday are EBay Inc. (EBAY), American Express and International
Business Machines Corp (IBM).
Yahoo Inc. (YHOO) gained 10.3% after the technology company
reported earnings that exceeded estimates.
Mattel Inc. (MAT) fell 6.8% after the toy maker reported much
weaker-than-expected quarterly results.
Crude futures (CLQ3) added 48 cents, or 0.5%, to $106.48 a
barrel and gold prices (GCQ3) fell $12.90, or 1%, to end at
$1,277.50 an ounce in New York.
The dollar (DXY) gained against the currencies of major U.S.
trading partners, including the yen (USDJPY).
Treasury yields declined, with the 10-year note (10_YEAR) lately
at 2.491%.
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