Stocks mostly rose on Tuesday after the Federal Reserve chairman, Ben S. Bernanke, defended the Fed’s bond-buying stimulus before Congress, but warned that forced spending cuts that could be set in motion this week represented a headwind for the economy.
Gains in homebuilders and other consumer stocks, following strong economic data, kept the overall market nearly unchanged, while a 5 percent jump in Home Depot lifted the Dow industrials. The Philadelphia Stock Exchange housing sector index rose 2 percent.
Stocks hit session highs shortly after Mr. Bernanke, in testimony before the Senate Banking Committee, strongly defended the Fed’s bond-buying stimulus program that has been essential for the stock market’s recovery.
But he also urged lawmakers to avoid sharp spending cuts set to go into effect on Friday, which he warned could combine with earlier tax increases to create a “significant headwind” for the economic recovery.
“He really came down foursquare on the bearish camp with respect to the potential economic impact of these cuts,” said Michael Jones, chief investment officer of Riverfront Investment Group in Richmond, Va. “That’s a surprise, and that’s probably why the market’s a little nervous right now.”
In early afternoon trading, the Dow Jones industrial average rose 74.64 points or 0.54 percent to 13,858.81. The Standard & Poor’s 500-stock index gained 1.78 points or 0.12 percent to 1,489.63. The Nasdaq Composite dropped 5.84 points or 0.19 percent to 3,110.41.
The S.&P. 500 failed to move above 1,500, a closely watched level that was technical support until recently, but could now become a hurdle.
The cable programmer AMC Networks was the Nasdaq’s biggest percentage decliner after AMC, the home of popular shows such as “The Walking Dead” and “Mad Men,” reported a quarterly profit far below analysts’ estimates. Its stock fell 7.4 percent to $53.77.
Equities continued to be weighed by concerns about a stalemate in Italy after a general election failed to give any party a parliamentary majority, posing the threat of prolonged instability and European financial crisis.
The FTSEurofirst-300 index of top European shares unofficially closed down 1.3 percent at 1,150.58. The benchmark Italian index tumbled 4.9 percent.
Home Depot, the world’s largest home improvement chain, was the top gainer in both the Dow and the S.&P. 500 after it reported adjusted earnings and sales that beat expectations. Home Depot’s shares jumped 5.5 percent to $67.46.
Macy’s shares climbed 2.8 percent to $39.60 after the department-store chain said it expected full-year earnings to be above analysts’ forecasts because of strong holiday sales.
Economic reports that showed strength in housing and consumer confidence also supported stocks.
United States home prices rose more than expected in December, according to the S.&P./Case-Shiller index. Consumer confidence rebounded in February, rising more than expected, and new-home sales rose to their highest in four and a half years.
This article has been revised to reflect the following correction:
Correction: February 26, 2013
Because of an editing error, an earlier version of this article misidentified the Senate panel before which Ben S. Bernanke, the Federal Reserve chairman, was testifying Tuesday. It was the Banking Committee, not the Finance Committee.
Wall Street Sheds Morning Gains
This article
Wall Street Sheds Morning Gains
can be opened in url
http://newsdalang.blogspot.com/2013/02/wall-street-sheds-morning-gains.html
Wall Street Sheds Morning Gains
