Comments by Janet Yellen, chairwoman of the Federal Reserve Board, saying the economy is gaining strength led to another sharp stock rally Tuesday.
The Dow Jones industrial average gained 192.98 points to 15,994.77, the third triple digit gain in the past four sessions. The Nasdaq composite index was up 42.87 points to 4,191.04 and the S&P 500 stock index rose 19.91 points to 1,819.75.
Yellen was testifying before the House Financial Services Committee, her first appearance since succeeding Ben Bernanke at the start of the month. She said interest rates will remain near zero for quite some time but that the economy has gained enough momentum to avoid another recession.
She repeated the Fed’s outlook for further reductions in “measured steps” and that asset purchases, known as quantitative easing, are not on a “preset course.”
While growth has picked up, “the recovery in the labor market is far from complete,” Yellen said in remarks to the House Financial Services Committee. “I am committed to achieving both parts of our dual mandate: helping the economy return to full employment and returning inflation to 2 percent while ensuring that it does not run persistently above or below that level.”
Gold continued to rally, up $15.10 to $1,289.80 an ounce. It has rallied 3 percent in the past five sessions. Oils slipped 12 cents to $99.4 a barrel.
Cliffs Natural Resources Inc. (NYSE: CLF) increased more than 2.4 percent to pace a rally among commodity shares.
Boeing Co. (NYSE: BA) and Goldman Sachs Group Inc. (NYSE: GS) jumped at least 2.1 percent, leading gains in the Dow Jones industrial average.
Sprint Corp. (NYSE: S) rose 2.7 percent to $7.90 after fourth-quarter revenue rose to $9.14 billion, beating the average analyst estimate calling for $8.99 billion in a Bloomberg survey.
About 7 billion shares changed hands on U.S. exchanges, 11 percent higher than the 30-day average.
Federal Open Market Committee officials have twice reduced the size of the monthly asset-purchase program, lowering bond buying to $65 billion in February from $85 billion last year. Three rounds of stimulus under previous Chairman Ben Bernanke have helped push the S&P 500 as much as 173 percent higher from a 12-year low in 2009.
The S&P 500 has rallied 4.5 percent over the past six sessions, trimming its decline for the year to 1.6 percent. The benchmark gauge closed at a record on Jan. 15 and then dropped 5.8 percent through Feb. 3 on signs of slowing growth in China and a rout in emerging-market currencies.
Equities extended gains amid congressional agreement on debt talks in Washington. The House voted Monday 221-201 to lift the debt ceiling until March 2015, removing the threat of a default until well after the November midterm election. The bill was supported by 193 Democrats and 28 Republicans.
A suspension of the U.S. debt limit enacted by Congress in October expired Feb. 7.
Treasury Secretary Jacob J. Lew said last week that borrowing authority may not last past Feb. 27.
Boeing added 2.4 percent to $130.16 and Goldman Sachs jumped 2.1 percent to $164.39. Newmont Mining Corp. (NYSE: NEM) climbed 3.2 percent as gold prices surged 1.2 percent.
Cliffs Natural Resources climbed 4.5 percent to $21.50. Cliffs has gained 11 percent this month after shareholder Casablanca Capital LP urged the biggest U.S. iron-ore producer to spin off its international assets, double its dividend and cut expenses. Cliffs was the second-worst performer in the S&P 500 last year, plunging 32 percent.
CVS Caremark Corp. (NYSE: CVS) climbed 2.7 percent to $68.77. The largest provider of prescription drugs in the U.S. posted fourth-quarter profit that topped analysts’ estimates. The new drugs and an expanded roster of clients for specialty pharmaceuticals, along with higher prices, boosted revenue from pharmacy services to $19.6 billion, the company said.
InvenSense Inc. (NYSE: INVN) climbed 11 percent to $21.69 after saying it has settled pending patent litigation proceedings with STMicroelectronics NV (NYSE: STM). The two companies entered into a patent cross-license agreement, resolving lawsuits over infringement.
ConAgra Foods Inc. (NYSE: CAG) dropped 6.3 percent to $29.08, the lowest level since November 2012. ConAgra cut its year-end profit forecast, reflecting a longer time frame to restore its private brands segment to planned levels of operating profit, as well as weaker-than-anticipated volumes in consumer foods.
— Bloomberg contributed to this report.