News Column

S&P hits fresh record high on Fed assurance

February 28, 2014

THE S&P 500 closed at a record last night and ended in positive territory for the year after Federal Reserve chair Janet Yellen said harsh weather seems to be to behind recent US economic softness.

Her comments gave some relief to investors who supported the view that heavy snowstorms and unusually cold weather - and not worsening fundamentals - were to blame for weak US employment, retail sales and other data.

The advance lifted the S&P 500 above its 2013 year-end closing level of 1,848.36, which has served as resistance in recent sessions.

"The market was worried. She could have excluded weather and perhaps talked more about the soft patch," said Quincy Krosby, market strategist at Prudential Financial.

Testifying before the Senate Banking Committee, Yellen also said the Fed would watch carefully to ensure weather was indeed the culprit behind the recent weakness. But she said it would take a "significant change" to the economy's prospects for the Fed to put plans to reduce its bond-buying programme on hold.

Retailers ranked among top gainers for a third session, with the shares of JC Penney - up 25 per cent - and others jumping after the companies posted strong results.

The Dow Jones industrial average rose 74.24 points or 0.46 per cent, to end at 16,272.65. The S&P 500 gained 9.13 points or 0.49 per cent, to finish at 1,854.29, surpassing its previous record closing high set on 15 January.

The Nasdaq Composite added 26.869 points or 0.63 per cent, to close at 4,318.933.

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Source: City A.M. (UK)

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