Technology companies led U.S. stocks higher Wednesday in a broad rally that helped nudge the Dow Jones industrial average to a new high.
In remarks before Congress, Federal Reserve Chair Janet Yellen raised the possibility that the central bank would consider slowing the pace of its interest rate increases if inflation remained persistently below its target level.
The move assuaged concerns among some traders worried that the Fed has been moving too quickly to raise interest rates despite a slowdown in inflation and the U.S. economy’s sluggish growth of just 1.4 percent in the first quarter.
The Standard & Poor’s 500 index gained 17.72 points, or 0.7 percent, to 2,443.25. The Dow rose 123.07 points, or 0.6 percent, to 21,532.14, a record high. The average, which had been up more than 171 points, last set a record high on June 19.
The Nasdaq composite added 67.87 points, or 1.1 percent, to 6,261.17. The Russell 2000 index of smaller-company stocks picked up 11.27 points, or 0.8 percent, to 1,424.32.
The stock market looked poised for a big move early on, climbing in premarket trading as investors began to size up Yellen’s prepared remarks, which were released ahead of her testimony.
The indexes opened higher across the board and stayed in the green the rest of the day. All 11 sectors in the S&P 500 index notched gains.
Yellen said she plans to start trimming the Fed’s massive bond holdings this year.
The yield on the 10-year Treasury note fell to 2.32 percent from 2.37 percent late Tuesday. Yields affect rates on mortgages and other consumer loans.
Technology companies led the market higher. PayPal gained $1.79, or 3.3 percent, to $56.55. Nvidia rose $6.63, or 4.3 percent, to $162.51. Activision Blizzard added $3.04, or 5.2 percent, to $61.02.
Real estate investment trusts and other high-dividend paying stocks benefited from rising bond prices, which pulled bond yields lower. Crown Castle International rose $1.76, or 1.8 percent, to $100.05. American Tower climbed $2.95, or 2.3 percent, to $133.88.
Several airlines also rose after American Airlines Group and United Continental reported solid results for June. American Airlines gained $2.19, or 4.2 percent, to $53.80. United Continental picked up $3.61, or 4.7 percent, to $80.53. Delta Air Lines rose $1.20, or 2.2 percent, to $55.48.
Oil prices wavered early Wednesday, but recovered following a report showing that U.S. crude oil inventories declined sharply last week.
Benchmark U.S. crude rose 45 cents, or 1 percent, to settle at $45.49 per barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, gained 22 cents, or 0.5 percent, to close at $47.74 per barrel in London.
Germany’s DAX up 1.5 percent, while France’s CAC 40 gained 1.6 percent. Britain’s FTSE 100 rose 1.2 percent.
The dollar fell to 113.25 yen from 113.84 yen late Tuesday. The euro weakened to $1.1416 from $1.1476.
Gold rose $4.40 to $1,219.10 an ounce. Silver added 14 cents to $15.89 an ounce. Copper inched up 1 cent to $2.68 a pound.
In other energy trading, wholesale gasoline was little changed at $1.52 a gallon. Heating oil slipped less than 1 penny to $1.47 a gallon. Natural gas fell 6 cents, or 2 percent, to $2.99 per 1,000 cubic feet.