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US: Dow, S&P 500 hit records after Fed testimony


[NEW YORK] The Dow and S&P 500 Tuesday bolted to fresh records after Federal Reserve Chair Janet Yellen pledged a cautious approach to raising interest rates.

The Dow Jones Industrial Average rose 92.35 points (0.51 per cent) to 18,209.19, besting Friday's record by about 70 points, and the broad-based S&P 500 gained 5.82 (0.28 per cent) at 2,115.48, inching up to a new all-time close.

The tech-rich Nasdaq Composite Index advanced 7.15 (0.14 per cent) to 4,968.12.

Ms Yellen, opening two days of congressional testimony, signaled that the Fed is deep in preparation for a rate hike this year, even as she essentially ruled out the move until June at the earliest.

Ms Yellen said the US labour market still showed cyclical weakness and inflation continued to fall, necessitating significant policy accommodation.

"There was a little something for everybody and no indication that a rate hike is coming soon," said Art Hogan, chief market strategist at Wunderlich Securities.

European stocks also rose strongly after eurozone finance ministers backed an extension of Greece's bailout, due to expire on Saturday.

London's FTSE 100 index reached a new record and equity markets in France and Germany also gained.

Dow member Home Depot surged 4.0 per cent as fourth-quarter earnings jumped 36 per cent to US$1.4 billion - results that bested analyst expectations. The company also unveiled a dividend increase and a new stock repurchasing programme.

JPMorgan Chase, a Dow component, rose 2.5 per cent after unveiling a plan to significantly pare back deposits from institutional clients that have become costly under new regulations.

Department store chain Macy's fell 3.2 per cent on its 2015 earnings projection of US$4.70-US$4.80 per share, below the analyst forecast of US$4.84 per share.

First Solar and SunPower, two solar companies, both jumped after announcing plans to form a so-called yieldco, a joint vehicle of selected solar generation assets from each company. First Solar rose 10.2 per cent, while SunPower gained 18.0 per cent.

Bond prices rose. The 10-year US Treasury fell to 1.98 per cent from 2.06 per cent Monday, while the 30-year dropped to 2.58 per cent from 2.66 percent. Bond prices and yields move inversely.