US stocks resume record march upward

The S&P 500 and the Dow Jones have both set new record highs today, as Janet Yellen signals her intention to stick with monetary stimulus.

We had an impressive close on Wall Street last night, with the Dow and S&P 500 both pressing on to achieve new record highs and the gains have been extended today, with both indices venturing higher to unprecedented levels.

The Dow had gained 0.24% or 38 points by early afternoon in New York, to stand at 15,860. The S&P 500, encompassing a wider selection of stocks and therefore more representative of the wider economy, achieved even more impressive gains, chalking up a rise of 0.40% at 1788.9.

Dow component Wal-Mart reported quarterly figures that just beat earnings estimates, but missed on the revenue front. Its share price declined initially after the company forecast US sales over the holiday season to be ‘relatively flat’, but CEO Mike Duke claimed Wal-Mart has ‘aggressive plans’ for the big shopping season. Shares in Wal-Mart recovered as the day wore on, gaining 0.4% to $79.20 a share.

Comments from Janet Yellen, who spoke today in front of the Senate’s Banking Committee, helped reassure investors. The text for her testimony was released after the market closed yesterday and stressed that there was still further to go with the recovery, with high unemployment and low inflation still remaining as problems to be solved.

In a question and answer session today she aligned herself firmly with the current programme of quantitative easing, saying, ‘It's important not to remove support, especially when the recovery is fragile and tools available to monetary policy, should the economy falter, are limited given that short-term interest rates are at zero.’

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.