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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.’