From The Associated Press
NEW YORK —
Stocks broke through record highs in early trading Thursday after Federal Reserve Chairman Ben Bernanke said the central bank is in no hurry to stop supporting the economy.
Bernanke said the U.S. economy still needed help because unemployment remains high and inflation is below the Fed’s target. The Fed is currently buying $85 billion a month in bonds to keep interest rates low and to encourage spending and hiring. Bernanke made the comments in a speech late Wednesday after U.S. markets had closed.
The comments were the Fed’s latest effort to reassure investors that it won’t end its stimulus before it is sure the economy is strong enough. Both stocks and bonds fell sharply on June 19 after Bernanke laid out a potential timetable for when the Fed might start to wind down its bond-buying program.
Bernanke “certainly surprised the markets last night,” said JJ Kinahan, Chief Derivatives Strategist for TD Ameritrade. “Many people had the expectation that there might be more pressure to (cut stimulus) soon.”
The Standard & Poor’s rose as high as 1,671 in early trading. It closed at a record high of 1,669 on May 21. The index was up 14 points, or 0.9 percent, at 1,666 as of 10:36 a.m. Eastern Daylight Time.
The Dow Jones industrial average rose 106 points, or 0.7 percent, to 15,400. It climbed as high as 15,456, above its own record high close of 15,409 set May 28.
The Nasdaq composite rose 34 points, or 1 percent, to 3,555. The Nasdaq is at its highest since October 2000 but is still well below the all-time high of 5,048 it reached March 10, 2000.
In government bond trading, the yield on the 10-year note fell to 2.59 percent from 2.63 percent Wednesday.
In commodities trading, the price of oil fell back from a 16-month high, dropping 83 cents, or 0.8 percent, to $105.66 a barrel. The price of gold rose for a fourth straight day, climbing $35.30, or 2.83 percent, to $1,283 an ounce.
Stock investors are also focusing on corporate earnings as companies start reporting results for the second quarter, which ended 11 days ago. S&P Capital IQ forecasts that companies in the S&P 500 will report average earnings growth of 3 percent compared with the same period a year ago.
JPMorgan and Wells Fargo report earnings Friday. Investors will be watching their results to see what impact rising interest rates are having on their business.
Among stocks making big moves:
— Bridgepoint Education rose $3.53, or 28 percent, to $16.25, after the for-profit education company said its Ashford University had won accreditation. Bridgepoint, which also operates the University of the Rockies, struggled with accreditation problems for much of 2012.
—Microsoft rose 64 cents, or 1.9 percent, to $35.36, after the company announced a major reorganization. The world’s largest software maker has been struggling with a steady decline in PC demand as people turn to tablets and other mobile devices.
— Rockwell Medical Technologies Inc. jumped 84 cents, or 22 percent, to $4.58, after the drug developer said its experimental treatment for iron deficiency in kidney patients met its goals in a late-stage study, an important step toward approval of the treatment.
— Celgene rose $8.47, or 6.8 percent, $133.50 after the Swiss drugmaker said its cancer drug Revlimid met its goals in a late-stage study as a treatment for the blood cancer multiple myeloma.