Dow and S&P on track for record closes

Share prices on Wall Street moved close to the day’s highs in the last hour of trading, buoyed by last night's reassurances from Ben Bernanke that monetary policy will remain accommodative.

With under an hour to go until the close of trading on the New York Stock Exchange, the Dow was trading up 1.08% or 165 points at 15,457 and the S&P 500 had risen 1.3% or 21.5 points to 1674.1. At those levels, both indices are set to close above their previous all-time closing highs.

This is the sixth session in a row in which the S&P has made gains. The small-cap Russell 2000 set a new all-time high for the fourth day in a row.

After much debate over what the Fed’s intentions are, despite the attempts from various Fed officials to provide clarity, Ben Bernanke’s speech last night took a clearly dovish tack. He said policy would remain highly accommodative for the foreseeable future, that inflation was too low, and that if unemployment drops to the threshold of 6.5% it would not necessarily trigger a tightening in policy.

Although Alcoa kicked off the second-quarter earnings season on Monday, reporting has been slim since then. That will change tomorrow when Dow-component JP Morgan releases its latest set of figures, along with financial services giant Wells Fargo. JP Morgan is expected to report earnings of $1.44 per share, while Wells Fargo is projected to make $0.93 per share. Both are such big players in the financial sector that good results from them should bode well for other blue chips in the same sphere.

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