The stock price in the United States ended the trading session with strong gains after Federal Reserve Chairperson Janet Yellen indicated optimism regarding the continuing growth of the economy.
Yellen also said that the central bank will likely continue its plan to reduce its monthly bond-buying program as the economy becomes stronger.
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In her speech to Congress today, Yellen said the economic growth strengthened and the labor market showed improvement. She also maintained the plan of the Federal Reserve to taper the stimulus at “measured steps.”
She emphasized, “I am committed to achieving both parts of our dual mandate: helping the economy return to full employment and returning inflation to 2 percent while ensuring that it does not run persistently above or below that level.” According to her, the recovery of the labor market is still far from complete.
Stephen Wood, chief market strategist at Russell Investments opined that Yellen will be “very careful to create a degree of stability.” He added, “No genius ideas out of left field, just very methodical. The market is not only going to like the message but they’re going to like the messenger. The Fed will be accommodative and the Fed will maintain credibility the bond market and equity market will appreciate.”
Lending credibility to Wood’s case, Steven Rees, head of U.S. equities at JPMorgan Private Bank said, “The market likes consistency and what we’ve heard this morning has been consistent with what we’ve heard for months. Tapering continues, but it continues to be the result of an economic situation that’s slowly improving. The economy is still on track to have a good year.”
- Dow Jones Industrial Average (DJIA)- 15,994.77 (+01.22%)
- S&P 500- 1,819.75 (+1.11%)
- NASDAQ- 4,191.05 (+1.03%)
- Russell 2000- 1,129.46 (+0.96%)
- EURO STOXX 50 Price EUR- 3,077.08 (+1.47%)
- FTSE 100 Index- 6,672.66 (+1.23%)
- Deutsche Borse AG German Stock Index DAX- 9,478.77 (+2.03%)
Asia Pacific Markets
- Nikkei 225- 14,718.34 (+1.77%)
- Hong Kong Hang Seng Index- 21,962.98 (+1.78%)
- Shanghai Shenzhen CSI 300 Index- 2,285.56 (+0.80%)
Stocks in Focus
The stock price of Cliffs Natural Resources Inc (NYSE:CLF) gained 4.47% to $21.50 per share after Casablanca Capital LP urged the company to spin off its international assets, increase its dividend, and reduce its expenses. The shares of the largest iron ore producer in the United States declined 32% last year, making it the second worst performer among the companies listed in the S&P 500.
ConAgra Foods, Inc. (NYSE:CAG) plummeted 6.34% to $29.08 after the company lowered its earnings forecast for the fiscal 2014. The company estimated that it will be able to deliver adjusted earnings in the range of $2.22 to $2.25 per share compared with its previous guidance in the range of $2.34 to $2.38 per share.
The stock value of InvenSense Inc (NYSE:INVN) increased 10.78% to $21.69 per share after announcing that it settled its pending patent litigation proceedings with STMicroelectronics N.V. (NYSE:STM). The two companies signed a patent cross-licensing agreement.