Stocks Gain Traction after Yellen Testimony
Stocks in the US started the trading session on a positive note as sentiment edge higher after Thursday rally and Janet Yellens confirmation testimony on Thursday in front of the Senate banking committee. Yellen was poised and collected and defended the Fed bond purchase program restating that the reward from quantitative easing currently outweighed the risks associated with the program.
The weaken yen gave a boost to Japanese stocks pushing the Nikkei above the 15,000 psychological barrier. The Shanghai equity bourses also rallied on hopes that China will release reform plans for state-run companies. The Nikkei jumped 2% to 15,165.92, extending its gain since last Friday to 7.7% which his the best weekly performance so far this year. A weaker yen continued to support Japanese stocks, as the dollar moved through the 100 mark for the first time in two months.
Yellen testified in front of the Senate banking committee on Thursday after releasing a prepared statement on Wednesday evening. The committee plans to vote on Dr. Yellen’s nomination as soon as next week. She is expected to then win confirmation from the full Senate, though some Republicans are likely to vote against her. Through her testimony she defended the Fed quantitative easing plan, and made it clear that rates would remain very accommodative for the foreseeable future.
Shares of The Men’s Wearhouse, Inc. (NYSE:MW) have dropped 11% to $41 in pre-market trade after clothing company Jos. A. Bank Clothiers, Inc. (NASDAQ:JOSB) terminated its $48 per share all-cash proposal to purchase the specialty retailer of men’s suits.
The Nasdaq composite continued to move higher as momentum gained traction. The MACD (moving average convergence divergence) index generated a buy signal where the spread (12-day moving average minus the 26-day moving average) crossed above the 9-day moving average of the spread.
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