Bank Stocks Surge Again, Leading Broader Market Higher

NEW YORK (AP) -

U.S. stocks rose Thursday as banks resumed their steep upward climb and retailers moved higher. Federal Reserve Chair Janet Yellen emphasized that the Fed plans to raise interest rates, which will help banks make more money from lending.

Stocks started the day with small gains and moved higher following Yellen’s testimony to Congress. Banks once again marched higher as investors cheered the latest indication that interest rates will rise from their current ultra-low levels.

Almost all of the S&P 500’s gains since the presidential election have gone to financial stocks. They lagged the market for much of this year, but they’re now trading at their highest levels since May 2008, months before the financial crisis peaked.

The Dow Jones industrial average added 35.68 points, or 0.2 percent, to 18,903.82. The Standard & Poor’s 500 index rose 10.18 points, or 0.5 percent, to 2,187.12. The Nasdaq composite added 39.39 points, or 0.7 percent, to 5,333.97. The Dow has set several records since the election, while the S&P 500 and Nasdaq are close to records they set a few months ago.

Fed Chair Yellen told Congress that the economy is improving and added that that if the Fed keeps waiting now and raises rates too quickly later, that increases the risk of a recession.

Investors already expected the Fed to raise interest rates when it meets in mid-December, and they felt Yellen’s comments confirmed that higher rates are coming.

Bond prices slipped. The yield on the 10-year U.S. Treasury note rose to 2.29 percent from 2.22 percent. Bond yields rise when investors expect higher interest rates and inflation.

Bank of America gained 33 cents, or 1.7 percent, to $20.08 and PNC Financial Services climbed $3.09, or 2.9 percent, to $110.60.

Greater sales of mobile phones and increased online sales helped electronics retailer Best Buy post a strong third quarter. The company forecast a larger fourth-quarter profit than analysts had expected. Its stock climbed $5.54, or 13.7 percent, to $45.99 and hit a six-year high.

Other retailers also rose. Home Depot recovered some recent losses and added $3.60, or 2.9 percent, to $128.93. Amazon also gained ground as Wal-Mart struggled. It picked up $9.91, or 1.3 percent, to $756.40.

Higher interest rates also mean a stronger dollar. The dollar climbed to 109.89 yen from 109.15 yen. The euro fell to $1.0626 from $1.0681. The ICE U.S. dollar index continued to rise. It’s at its highest level in 13 years.

Oil prices gave up a small gain and turned lower. Benchmark U.S. crude slid 15 cents to $45.42 a barrel in New York. Brent crude, which is used to price international oils, slipped 14 cents to $46.49 a barrel in London. Energy companies lagged the market after big gains earlier this week.

In other energy trading, wholesale gasoline rose 2 cents to $1.34 a gallon. Heating oil rose 1 cent to $1.45 a gallon. Natural gas fell 6 cents, or 2.2 percent, to $2.70 per 1,000 cubic feet.

Gold fell $7 to $1,216.90 an ounce and silver lost 16 cents to $16.77 an ounce. Copper rose 2 cents to $2.49 a pound.

The FTSE 100 index of leading British shares added 0.7 percent and the CAC 40 in France rose 0.6 percent. Germany’s DAX gained 0.2 percent. Japan’s Nikkei 225 barely moved and the Hang Seng index in Hong Kong eased 0.1 percent. The Kospi in South Korea inched higher.

&