Yellen Comments Supports Market Rise, Euro Inflation Drops to 40-Month Low

Nichole Harper
31 Mar, 2014
New York City

U.S. stocks gained and market indexes advanced after Fed Chairwoman offered strong support for the economic stimulus. The tone of the support was welcomed by investors but Yellen

[R]3:10 PM New York – U.S. stocks gained and market indexes advanced after Fed Chairwoman offered strong support for the economic stimulus. The tone of the support was welcomed by investors but Yellen’s comments lacked details. Euro zone inflation dipped to the lowest level since November 2009.[/R]

Market indexes on Wall Street opened higher and stayed firm after investors shifted focus from rising tensions in Europe to domestic economy.

The advance in stocks was supported by comments from the Federal Reserve chairwoman Janet L. Yellen.

Chairwoman Yellen said that the U.S. economy and labor markets would need a continued support for some time to come.

The comments were interpreted by investors as the continuation of low interest policy after Yellen offered a strong support to the Fed’s commitment to bond buying. Yellen also said that there is a considerable slack in the economy and job market is not near normal conditions.

S&P 500 index increased 14.36 or 1.14% to 1,871.97 and the Nasdaq Composite Index added 46.99 or 1.13% to 4,202.92.

European Markets

European markets rose for the fifth day in a row after speculation rose that the European Central Bank may ease interest rates again and offer other stimulus measures.

The annual rate of inflation across euro zone of 18 member nations weakened to 0.5% in March, according the euro stat. The inflation rate was the lowest since late 2009.

In London trading, FTSE 100 index rose 0.1% or 7.54 to 6,623.12 and in Frankfurt the DAX index slid 0.03% or 2.84 to 9,584.35.

In Paris, CAC 40 index gained 0.1% or 6.09 to 4,417.35.

U.S. Movers

Johnson & Johnson ((JNJ)) gained 64 cents to $98.08 after the health care company agreed to sell its Ortho-Clinical Diagnostics unit to a private-equity firm Carlyle Group for about $4 billion. The deal is expected to close mid-year.

Time Warner Cable Inc ((TWC)) rose 1% or $1.42 to $137.29 after Charter Communications Inc. urged the shareholders of Time Warner to reject $45.2 billion buyout agreement that the company reached last month with Comcast Corp.

UTi Worldwide Inc ((UTIW)) plunged 8.7% or 98 cents to $10.28 after the air freight and logistics company revenues in the fourth-quarter ending in January fell 2.1% to $1.07 billion.

Net loss in the quarter narrowed to $50.7 million or 48 cents a diluted share compared to $142.8 million or $1.38.