Stocks rise on Fed stimulus hopes, home sales
NEW YORK (AP) - Stocks are moving higher Wednesday after Federal Reserve Chairman Ben Bernanke said it was too soon for the central bank to pull back on its economic stimulus programs.
Investors were also encouraged by news that sales of previously-occupied U.S. homes rose last month to the highest level in three and a half years.
The Dow Jones industrial average was up 40 points before Bernanke began his testimony before a congressional committee, then jumped as much as 154 points shortly after he began speaking at 10 a.m. That's also when the National Association of Realtors released its report on home sales.
The Dow pared its gain after Bernanke told lawmakers in a question-and-answer session that the central bank could not rule out tapering its stimulus programs by the fall.
By noon Eastern Daylight Time the Dow was up 114 points at 15,503, an increase of 0.7 percent.
The Standard and Poor's 500 index rose 10 points to 1,679, an increase of 0.6 percent.
The Federal Reserve has been keeping short-term interest rates near zero to encourage people and businesses to borrow and spend more. The Fed has also been buying $85 billion worth of bonds each month to push down long-term interest rates.
Later on Wednesday, the Fed will also release minutes of its latest policy meeting.
Among stocks making big moves:
_Bristol-Myers Squibb jumped 6 percent, or $2.55, to $46.61 after a Citigroup analyst raised his rating on the drugmaker. The analyst said the company could be a big winner with a group of cancer treatments under development.
_Saks rose $1.93, or 14 percent, after The New York Post reported the luxury retailer had hired Goldman Sachs to explore options for the company, including a possible sale. A spokesman for Saks declined to comment.
_Target fell $2.21, or 3 percent, to $69.51 after announcing a 26 percent drop in first-quarter profits. The company also said full-year earnings may come in lower than previously expected.
_ Homebuilders rose after the home sales report came out. Lennar rose $1.18 to $43.65, or 3 percent. Pulte rose 42 cents to $23.47, or 2 percent. Toll Brothers, which also reported a 46 percent surge in second-quarter earnings, jumped $2.63, or 7 percent, to $38.63.
On Tuesday, stocks rose after James Bullard, president of the St. Louis branch of the Federal Reserve, told an audience in Germany that the central bank should continue buying bonds.
Both the Dow and the S&P 500 are up 18 percent since the start of the year.
The Russell 2000 index of small-company stocks rose six points to 1,005, a gain of 0.7 percent. The index is headed for its first close above 1,000 points.
The Dow, S&P and Russell are at record highs.
The Nasdaq composite was up 18 points at 3,520, or 0.5 percent.
The yield on the benchmark 10-year Treasury note rose to 1.97 percent from 1.93 percent late Tuesday. The price of gold rose $2.90 to $1,380 an ounce, an increase of 0.2 percent. Crude oil fell $1.16 to $95.02 a barrel on the New York Mercantile Exchange.
(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)