FEDERAL Reserve Chairman Ben Bernanke reassured lawmakers interest rates will remain low, driving US stocks higher yesterday as investors welcomed the promise of more cheap money.
Banks, which have benefited from borrowing rates at historic lows, led the market higher. Bank of America was the Dow’s biggest percentage gainer, rising 2.45 per cent.
Investors overlooked a 47-year-low in the pace of new home sales and the generally somber tone taken by Bernanke on the economy.
Semiconductor shares recovered most of the previous session’s losses, with Micron Technology up 5.6 per cent at $9.09, and Intel up 1.5 per cent at $20.70. The PHLX semiconductor index rose 1.9 per cent.
JPMorgan Chase rose 2.4 per cent to $40.85 and the KBW bank index jumped 2.3 per cent.
The major indexes are still negative for the week after Tuesday’s decline, the largest in nearly three weeks for the market .
The Dow Jones industrial average gained 91.75 points, or 0.89 per cent, to 10,374.16. The Standard & Poor’s 500 Index rose 10.64 points, or 0.97 per cent, to 1,105.24. The Nasdaq Composite Index advanced 22.46 points, or 1.01 per cent, to 2,235.90.
On the Nasdaq, Autodesk shot up 8.7 per cent to $27.89 a day after the software maker posted better-than-expected quarterly profit.
Monsanto shares fell 2.5 per cent to $74.04 on reaction to a weaker-than-expected second-quarter outlook and persistent struggles with its glyphosate business.
D.R. Horton slid 1.8 per cent to $12.34, and the Dow Jones Home construction index fell 0.7 per cent.
H&R Block shares tumbled 12.2 per cent to $17.32 after the largest US tax preparer said it would not be able to meet its fiscal 2010 outlook, blaming high levels of unemployment that have led to a drop in tax filings.
About 7.63bn shares were traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year’s estimated daily average of 9.65bn.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 11 to 4, while on the Nasdaq, more than five stocks rose for every three that fell.