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 The Nasdaq was boosted by strength in large-cap tech and pharma
names, but most market participants took a wait-and-see attitude
ahead of the testimony, looking for confirmation that the Fed would
not change its schedule for ending its support for the economy.
The U.S. central bank's accommodative monetary policies have been
credited with fueling the market's steep gains in 2013, and are
expected to keep a floor under equity prices for as long as they
continue.
The Fed first announced a slowing in the bond-buying program in
December, followed by another one in January. If it changes the pace
of tapering — and uncertainty in emerging markets and the weak
January payrolls have raised the odds of that to some — it may raise
concerns that the economy is still not strong enough to strengthen
on its own.
"We're hoping to hear Yellen strike a balance where she recognizes
that the recovery is fragile, but not so much that the Fed changes
its mind, which would be too premature of a signal to send," said
Leo Grohowski, chief investment officer at BNY Mellon Wealth
Management in New York.
Yellen's prepared remarks will be available before the market opens
on Tuesday. She will also participate in a question-and-answer
session with U.S. lawmakers after the open.
The Dow Jones industrial average <.DJI> was up 7.71 points, or 0.05
percent, at 15,801.79. The Standard & Poor's 500 Index <.SPX> was up
2.82 points, or 0.16 percent, at 1,799.84. The Nasdaq Composite
Index <.IXIC> was up 22.31 points, or 0.54 percent, at 4,148.17.
The S&P 500 is coming off its best two-day performance in four
months, which capped the index's first weekly gain in the past four.
Those gains were preceded by the index's sharpest pullback in
months.
"Last week investors received a wake-up call that 2014 is unlikely
to be like 2013 in terms of the return or the smoothness of the
ride," said Grohowski, who helps oversee $185 billion in client
assets. "We're still digesting last week's volatility, but investor
sentiment is now neutral or negative, which is a positive for
markets."
McDonald's Corp <MCD.N> reported a decline in U.S. January
same-store sales, though global sales were above expectations.
Shares fell 1.1 percent to $94.86.
Alexion Pharmaceuticals Inc <ALXN.O> was the top boost to the Nasdaq
100 <.NDX>, jumping 4 percent to $170.11 after Deutsche Bank raised
its price target to $205 from $125.
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Hasbro Inc <HAS.O> was the S&P's top percentage gainer, rising 4.5
percent to $52.36. The toymaker reported quarterly results and gave
an upbeat outlook.
With about 69 percent of the S&P 500 having reported, 67.8 percent
have topped profit expectations, above the long-term average of 63
percent, according to Thomson Reuters data. Almost 66 percent have
topped revenue forecasts, above the historical average of 61
percent.
After the market closed, voice technology company Nuance
Communications <NUAN.O> fell 2.3 percent after reporting its
first-quarter results.
CNA Financial Corp <CNA.N> said it would sell its life and group
insurance business, while parent Loews Corp <L.N> reported a bigger
quarterly loss, hurt by impairment charges. CNA gained 6.9 percent
to $42.42 while Loews lost 4.2 percent to $43.26 as the worst
performer on the S&P 500.
Yelp Inc <YELP.N> advanced 1.9 percent to $91.11. The Wall Street
Journal reported on Saturday that Internet portal Yahoo <YHOO.O> was
partnering with the consumer-reviews website to beef up local
results in its search engine. Yahoo rose 1.4 percent to $37.76.
Apple Inc <AAPL.O> rose 1.8 percent to $528.99 after Carl Icahn said
in a letter to shareholders he sees no reason to persist with his
proposal that the iPhone maker buy back $50 billion of its shares.
AutoNavi Holdings Ltd <AMAP.O> surged 24.4 percent to $20.57 after
Alibaba Group <IPO-ALIB.N> disclosed in a filing with the Securities
and Exchange Commission that it had offered to buy all the shares of
the Chinese digital mapping and navigation firm it does not already
own.
About 56 percent of companies traded on both the New York Stock
Exchange and Nasdaq closed higher on the day. About 5.83 billion
shares traded on all U.S. platforms, according to BATS exchange
data.
(Editing by Nick Zieminski)
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