Bernanke’s stance on monetary policy remains the same
Stocks in the US moved higher on the open as confirmation of Bernanke stance on monetary policy remained the same with a dovish tilt. The Chairman later needed to face a question and answer session from the House of Representatives, formerly known as the Humphrey Hawkins testimony. Housing starts were released prior to the opening bell, declining, while building permits also declined.
Housing starts declined unexpectedly in June, as higher rates throughout the month made new purchases difficult for mortgage borrowers. According to the Commerce Department housing starts show an annualized rate of 836,000 houses down 9.9 percent from a revised 928,000 pace in May. Building permits fell 7.5 percent last month to a 911,000-unit pace. Economists had expected them to rise to a 1-million unit pace. Mortgage rates generally follow the 10-year government bond which saw yields climb nearly 1% in June.
In earnings news, Bank of America (NYSE:BAC) continued the string of strong earnings by financial institutions. JP Morgan (NYSE:JPM) , Citigroup (NYSE:C) and Goldman Sacks (NYSE:GS) have all reported better than expected earnings. Financials have been some of the leader in the latest rally in the broader index, and Bank of America’s earnings on Wednesday did not disappoint. Bank of American earned $3.6 billion in the second quarter up 70 percent from $2.1 billion a year ago. Net profits were 32 cents a share better than the 25 cents per share expected by analysts.
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