US Stocks closed at new records as investors reacted positively to the remarks of Janet Yellen, US Federal Reserve Chair and Greece won approval from the EU for its proposed budget reforms.
According to The Wall Street Journal, the Dow Jones Industrial Average rose 0.5% or 95 points to 18,212 on track to close at its second record for the year. The S&P 500 gained 0.2% or five points to 2115 and was poised for a record close.
The Nasdaq Composite climbed 0.1% or four points to 4,965 on track for its 10th straight session of gains, which would be its longest streak since Jul 2009. The index is less than 2% from topping its 5,048.62 record close of March 2000.
Yellen, before the Senate banking committee, used a word that investor are familiar with when she said that the central bank would be patient on raising interest rates for the first time since the financial crisis of 2008.
Yellen said that while the US economy has improved, she noticed the weakness in overseas economies, with inflation still below the 2% target of the Fed and wage growth remaining tepid.
David Seaburg, head of sales trading at Cowen and Co. said, “She came out and was essentially as dovish as you can be. The market views it as a positive sign.”
He added, “The Fed is no longer supportive in trying to encourage stock market valuations to go up. The bottom line for the equity markets is they just have to earn their way to returns now.”
USA Today reported that the Japan Nikkei 225 Index added 1% while the Hang Seng Index of Hong Kong declined 0.4%.
European stocks drifted sideways while the Greek ASE Index rose 8.7% after the government submitted the reforms list and EU officials gave their go ahead.
The American Depository Receipts of the National Bank of Greece rose to $1.93 by 2%.
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