S&P 500 Sets New Record Close After Yellen Remarks

U.S. stocks climbed on Thursday, propelling the S&P 500 to a record close, after Federal Reserve Chair Janet Yellen said the central bank would probably continue tapering its asset purchases while tracking data to figure how much recent softness in the economy is due to the weather.

Appearing before the Senate in testimony delayed by a snowstorm, Yellen said the harsh weather could have played a role in the recent spate of tepid economic data.

The Fed has asserted that the economy is steadily improving. As such, it began dialing back, or tapering, the size of its monthly bond purchases in December. It currently is buying $65 billion in bonds per month, down from $85 billion a month last year.

Market strategists expect the Fed to keep scaling back its bond-buying program, but listened in to Yellen for hints about when the central bank may raise interest rates. To that end, Yellen maintained the Fed’s stance that interest rates will stay low for some time. Still, minutes from the Fed’s January meeting showed some internal debate about whether rates should be raised sooner rather than later.

Appetite for equities and other riskier assets started Thursday’s session on shaky ground on military and political unease in Ukraine and Russia.  European markets finished the day mixed as traders fretted about the formation of a new Ukrainian government and its increasingly dire economic situation. Asian markets also ended with mixed results.

News Sources:  CNBC and CNN Money

FRIDAY: GDP, Chicago PMI, consumer sentiment, pending home sales, Fed’s Stein speaks, Fed’s Evans speaks

Market Update:

Janet Yellen was the hero for the bulls today as she said that should the data not be weather related then the fed would consider tapering the taper and slowing the process of fire hosing money into the economy.  More data out tomorrow.

Now the S&P has had a classic breakout new high, prices may not retrace very much in the coming days.  The market may look to shoot for a higher high.  At some point there will be weakness and it is due, but for now, nothing to do.