Stocks up on reassurance from Bernanke

The stock market has climbed back to record levels in July following its brief slump in June, when the S&P 500 logged its first monthly decline since October on concern that the Federal Reserve would ease back on its economic stimulus too quickly. The S&P 500 has gained 4.7 percent in July after falling 1.5 percent in June. It climbed to a record 1,682 on Monday.

The index is up 17.9 percent this year, and stocks could head higher still as the economy improves in the second half of the year, says Rob Lutts, chief investment officer at Cabot Money Management.

"Expect better things," said Lutts. "The market's going to churn its way higher from here."

Investors are also keeping an eye on company earnings during one of the busiest weeks for second-quarter profit reports.

Bank of America rose 39 cents, or 2.8 percent, to $14.31 after it reported surging earnings for the period, helped by cost-cutting and investment banking gains. Bank of New York Mellon gained 57 cents, or 1.9 percent, to $30.92, after the bank posted earnings that beat analysts' expectations. Net income surged in the second quarter as market conditions improved and it collected more fees for managing investments.

Banks and financial companies are expected to report the strongest earnings growth of all S&P 500 companies, according to data from S&P Capital IQ. The growth for the sector is expected to reach almost 20 percent, according to the data provider. That compares to the average growth of 3.4 percent forecast for all companies.

In commodities trading, the price of crude oil rose 48 cents to $106.48 a barrel. Gold fell $12.90, or 1 percent, to $1,277.50 an ounce.

The dollar rose against the euro and the Japanese yen.

Among other stocks making big moves Wednesday:

— Yahoo rose $2.78, or 10.3 percent, to $29.66 after the company reassured investors that it would keep buying back its own stock. The internet company had already spent $3.6 billion buying back about 190 million of its shares since last year. The stock is trading at its highest in more than five years.

— DuPont rose $2.87, or 5.3 percent, to $57.25, after the activist investor Nelson Peltz told CNBC that his fund had bought a big stake in the company. Peltz was also speaking at the Delivering Alpha conference.

— Toy maker Mattel fell $3.17, or 6.8 percent, to $43.16 after its second-quarter net income fell 24 percent, hurt by weak sales in North America and continued softness in Barbie sales, as well as an asset impairment charge.

— St. Jude Medical surged $2.54, or 5.2 percent, to $51 after the medical device maker reported better-than-expected second-quarter earnings on higher sales of its heart-shocking implants.

Previous

1 | 2