Stocks Mostly Higher In Reaction To Yellen's Testimony - U.S. Commentary

(RTTNews) - After seeing modest weakness in morning trading, stocks have moved mostly higher over the course of the trading day on Thursday. With the upward move on the day, the Dow and the S&P 500 have once again reached new record intraday highs.

Currently, the Dow is up 31.37 points or 0.2 percent at 15,853.00 and the S&P 500 is up 6.38 points or 0.4 percent at 1,788.38. The Nasdaq is posting a slim loss, however, with the tech-heavy index down 0.48 points or less than a tenth of a percent at 3,965.09.

The strength on Wall Street partly reflects a positive reaction to Janet Yellen's testimony at her confirmation hearing before the Senate Banking Committee.

Yellen, President Obama's nominee to succeed Federal Reserve Chairman Ben Bernanke, defended the ultra-easy monetary policy that has seen the Fed's balance sheet more than quadruple since 2008 to nearly $4 trillion.

"Under the wise and skillful leadership of Chairman Bernanke, the Fed helped stabilize the financial system, arrest the steep fall in the economy, and restart growth," Yellen told the committee.

She added, "We have made good progress, but we have farther to go to regain the ground lost in the crisis and the recession."

Yellen argued that unemployment remains too high for the Fed to consider significantly scaling back its $85 billion a month in asset purchases.

"I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy," Yellen said.

While stocks have moved mostly higher on the heels of Yellen's remarks, a steep drop by Cisco (CSCO) continues to weigh on the Nasdaq.

Shares of Cisco have plunged by 12.3 percent after the networking giant reported better than expected first quarter earnings but forecast full-year earnings below analyst estimates.

Meanwhile, traders have largely shrugged off the mixed batch of economic data that was released before the start of trading.

Sector News

With Cisco leading the way lower, substantial weakness is visible among networking stocks. The NYSE Arca Networking Index has plunged by 3 percent after ending the previous session at its best closing level in almost a month.

Ciena (CIEN) and Adtran (ADTN) are posting notable losses along with Cisco, falling by 5.9 percent and 3.1 percent, respectively.

Meanwhile, gold stocks have shown a strong move to the upside on the day, moving higher along with the price of the precious metal. With gold for December delivery climbing $21.10 to $1,289.50 an ounce, the NYSE Arca Gold Bugs Index is up by 1.8 percent.

Significant strength has also emerged among housing stocks, as reflected by the 1.7 percent gain being posted by the Philadelphia Housing Sector Index. Ryland Group (RYL), PulteGroup (PHM) and Lennar (LEN) are posting notable gains.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a strong performance during trading on Thursday. Japan's Nikkei 225 Index surged up by 2.1 percent, while Hong Kong's Hang Seng Index advanced by 0.8 percent.

The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index rose by 0.5 percent, the French CAC 40 Index and the German DAX Index jumped by 1 percent and 1.1 percent, respectively.

In the bond market, treasuries have moved higher over the course of the session, climbing further off their recent lows. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.3 basis points at 2.702 percent.