The Nasdaq jumped to a 10-year high as US stocks rallied today after Fed chairman Ben Bernanke's first-ever press conference did nothing to short-circuit investors' optimistic outlook on the economy.
All three major US stock indexes extended gains after comments from Mr Bernanke at his press conference, where he reiterated the Fed's stance that inflation was a transitory problem related largely to commodity price pressures.
The Nasdaq Composite Index closed at 2,869.88, the highest close for the index since December 12th, 2000. Among the day's leading gainers were retailers and biotechnology names.
The Russell 2000 Index hit an all-time closing high of 858.31 as investors kept buying small-caps, a sector associated with a strong outlook for economic growth.
At the news conference, Mr Bernanke said there was "a bit less momentum in the economy" and he foresaw "a relatively weak number, maybe under 2 per cent" for growth in gross domestic product in the first three months this year, indicating the Fed is likely to maintain its accommodative policy despite worries about inflation.
"He handled himself real well. He didn't fumble anything," said Alan Valdes, director of floor trading at DME Securities in New York. "In all honesty, I would give him a B-plus. He held himself up well. He didn't trip over any questions."
Biotech stocks helped boost the Nasdaq, as Regeneron Pharmaceuticals surged 28.6 per cent to $67.05 after its experimental cancer drug, Zaltrap, being developed with Sanofi-Aventis, extended survival in patients in a late-stage trial.
The NYSEArca biotechnology index gained 2.8 per cent.
The Dow Jones industrial average gained 95.59 points, or 0.76 per cent, to 12,690.96. The Standard &a Poor's 500 Index rose 8.42 points, or 0.62 per cent, to 1,355.66. The Nasdaq Composite Index climbed 22.34 points, or 0.78 per cent, to 2,869.88.
General Electric helped lift the Dow, rising 2.7 per cent to $20.65 after the company's finance chief said GE's profit growth over the next few years will be the fastest it had seen in a decade.
Boeing, Whirlpool and WellPoint also moved higher after topping analysts' consensus expectations. Boeing, also a Dow component, rose 0.8 per cent to $76.12.
Whirlpool gained 0.9 per cent to $88.65 and WellPoint added 3.5 per cent to $75.54.
According to Thomson Reuters data today, of the 220 companies in the S&P 500 that have reported earnings, 73 per cent have posted earnings above estimates.
Advancers outnumbered decliners by a ratio of almost 2 to 1 on the New York Stock Exchange, while on the Nasdaq, eight stocks rose for every five that fell.
Reuters
