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US stocks at new records on Yellen testimony

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(Globalpost/GlobalPost)

US stocks Thursday barrelled to fresh records, shrugging off some disappointing earnings results amid greater confidence the Federal Reserve will wait longer before scaling back its aggressive stimulus program.

The Dow Jones Industrial Average tacked on 54.59 points (0.35 percent) at 15,876.22.

The broad-based S&P 500 rose 8.62 (0.48 percent) to 1,790.62, while the tech-rich Nasdaq Composite Index added 7.16 (0.18 percent) at 3,972.74.

The gains pushed the Dow and S&P 500 to new all-time records for the second day in a row.

Investors welcomed testimony from Fed Vice Chair Janet Yellen, who has been nominated to lead the central bank, at her confirmation hearing before the Senate Banking Committee. Yellen defended the Fed's $85 billion a month bond-buying program and rejected suggestions the program had generated fresh bubbles in property or stock markets.

"It wasn't surprising, but a real feel-good speech," said Alan Skrainka, chief investment officer at Cornerstone Wealth Management.

"I think it gave the market confidence that tapering isn't going to happen any time soon."

Dow component Cisco Systems sank 11.0 percent after company officials warned of slowing investment in China and other key emerging economies. Chief executive John Chambers of the network-equipment maker reported double-digit order declines in Mexico, India, China, Brazil and Russia.

Wal-Mart Stores, another Dow component, edged 0.2 percent higher after earnings exceeded expectations by a penny at $1.14 a share. On the downside, the company trimmed its full-year profit forecast.

Retailer Kohl's fell 8.1 percent after earnings lagged expectations and the company trimmed its full-year profit forecast from $4.15-$4.35 per share to $4.08-$4.23 per share. The company forecasts comparable-store sales at best flat or declining up to 2 percent.

Yoga-attire manufacturer Lululemon Athletica lost 4.1 percent after Sterne Agee downgraded the stock to "underperform".

The broker cited the company's unresolved search for a new chief executive and recent comments from the company's chairman and founder that some of the company's products "don't work" for some women. Sterne Agee said the comments offended many consumers.

Bond prices rose. The yield on the 10-year US Treasury dipped to 2.70 percent from 2.73 percent Wednesday, while the 30-year declined to 3.80 percent from 3.83 percent. Bond prices and yields move inversely.

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http://www.globalpost.com/dispatch/news/afp/131114/us-stocks-at-new-records-yellen-testimony-0