Yellen Testimony Drive Gains
Stocks moved higher on the open as investor’s awaiting Janet Yellen’s first Congressional appearance in front of the congressional finance committee in a semi-annual testimony which used to be called the Humphrey Halkins testimony. At a hearing before a House panel today, Yellen reiterated the bank’s plan to continue scaling back its bond purchase program at a measured pace.
On Wednesday the House of Representatives is scheduled to vote on a bill to lengthen the government’s borrowing authority until March 2015 and restore cost-of-living increases for military veterans. The restored benefits would be paid for by extending cost reductions in certain programs, including Medicare, for a year. Whether the bill will gain enough support from Republicans or Democrats is unclear. In 2013, the vote on the debt ceiling generated significant volatility as it came right down to the wire.
In the financial space, Barclays’ Q4 net losses rose to 514M pounds from 364 million pounds a year earlier, partly due to increased restructuring costs, and a 331 million charge for litigation and regulatory penalties. Barclays (NYSE:BCS) intends to axe 10,000-12,000 jobs in 2014 in order to trim costs. Raising eyebrows is a 10% increase in the bank’s 2013 bonus pool to 2.38 billion even though adjusted pretax profit fell 32%.
Stock surged throughout the session with all three major indices closing in the black. The Nasdaq 100 nearly made a new multi-year high as momentum continued to grind higher. The MACD (moving average convergence divergence) index generated a buy signal as the spread (the 12-day moving average minus the 26-day moving average) crossed above the 9-day moving average of the spread. The index moved from negative to positive territory confirming the buy signal.
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