US close: Dow jumps 260 points as stocks rally on Yellen's comments
US stocks rallied on Monday, as investors remained buoyed by comments Federal Reserve chairwoman Janet Yellen made late on Friday.
The Dow Jones Industrial Average closed up 263.65 points to 17,976.31, while the S&P 500 and the gained Nasdaq 25 and 56 points respectively.
The Fed chairwoman said the central bank would be “uncomfortable” hiking rates if consumer prices, wage growth and other measures of underlying inflation were to weaken.
“Wage growth, spending and inflation are the bigger concern of the Fed right now and the core personal consumption expenditure price index is the Fed’s preferred inflation measure,” said Craig Erlam, senior market analyst at Oanda.
Personal incomes in the US grew slightly more quickly than expected last month, but gains in spending failed to meet analysts’ forecasts.
Consumer expenditures grew by 0.1% month-on-month, according to the Bureau of Economic Analysis, while incomes grew 0.4% month-on-month in February, in line with analysts’ expectations.
Analysts at Capital Economics said they expected Fed funds rate to finish 2016 higher than 2.5%.
"We dispute Yellen's apparent assertion that the equilibrium real rate is now as low as zero and we're sceptical of the FOMC's unemployment and inflation projections too," they said in a note.
"We think the former will fall more rapidly while the latter will rebound sooner."
Meanwhile, US pending home sales in February climbed to their highest level since June 2013, figures released on Monday showed.
The National Association of Realtors (NAR) said its pending-home-sales index increased 3.1% month-on-month to 106.9 from the downwardly revised January's figure, meaning the index has risen 12% from February 2012.
In company news, Auspex Pharmaceuticals jumped 41.53% after it had agreed to a $3.2bn takeover offer from sector peer Teva Pharmaceutical Industries.
Pharmacy-benefit manager group Catamaran Corp surged 23.82% after confirming it had accepted a takeover bid, worth approximately $12.8bn, from UnitedHealth Group, which rose over 2.53%.
Shell eggs manufacturer and distributor Cal-Maine Foods slid 1.79% despite reporting that sales climbed 11% in the third quarter on the back of increased demand over the holiday period.
Electric carmaker Tesla Motors rose 3.01%, after group chief executive Elon Musk teased investors by tweeting that the company would launch a new product at the end of next month, but it will not be a car.
After tumbling on Friday, oil prices slid slightly, with West Texas Intermediate losing 0.25% to $48.99 a barrel, while Brent crude slid 0.05% to $56.38 a barrel.
The dollar rose over 0.57% against the euro and the pound and gained 0.74% against the euro, while gold futures slid 1.21% to $1,185.30.
S&P 500 - Risers
Analog Devices Inc. (ADI) $64.82 +10.16%
CONSOL Energy Inc. (CNX) $27.93 +4.37%
Peabody Energy Corp. (BTU) $5.34 +4.09%
HCP Inc. (HCP) $43.81 +3.94%
Carmax Inc. (KMX) $69.22 +3.79%
Express Scripts Holding Co (ESRX) $85.40 +3.67%
Staples Inc. (SPLS) $16.70 +3.63%
Western Union Co. (WU) $20.40 +3.55%
Exelon Corp. (EXC) $33.57 +3.52%
EQT Corp. (EQT) $82.70 +3.28%
S&P 500 - Fallers
Altera Corp. (ALTR) $42.82 -3.54%
Mylan Inc. (MYL) $60.00 -2.64%
Lorillard Inc. (LO) $66.42 -2.60%
GameStop Corp. (GME) $37.69 -1.75%
Intel Corp. (INTC) $31.46 -1.69%
Reynolds American Inc. (RAI) $69.47 -1.60%
Chipotle Mexican Grill Inc. (CMG) $655.36 -1.11%
Starwood Hotels & Resorts Worldwide Inc. (HOT) $84.33 -1.06%
H&R Block Inc. (HRB) $31.71 -1.00%
Newmont Mining Corp. (NEM) $22.02 -0.94%
Dow Jones I.A - Risers
Boeing Co. (BA) $152.70 +2.59%
Unitedhealth Group Inc. (UNH) $121.00 +2.53%
Chevron Corp. (CVX) $106.90 +2.51%
Exxon Mobil Corp. (XOM) $85.63 +2.45%
JP Morgan Chase & Co. (JPM) $60.96 +2.37%
Travelers Company Inc. (TRV) $109.64 +2.34%
Caterpillar Inc. (CAT) $81.37 +2.13%
Cisco Systems Inc. (CSCO) $27.65 +1.92%
United Technologies Corp. (UTX) $118.83 +1.65%
Goldman Sachs Group Inc. (GS) $191.02 +1.57%
Dow Jones I.A - Fallers
Intel Corp. (INTC) $31.46 -1.69%
Microsoft Corp. (MSFT) $40.96 -0.02%
Nasdaq 100 - Risers
Catamaran Corp (CTRX) $59.90 +23.97%
Analog Devices Inc. (ADI) $64.82 +10.16%
Express Scripts Holding Co (ESRX) $85.40 +3.67%
Staples Inc. (SPLS) $16.70 +3.63%
Tesla Motors Inc (TSLA) $190.57 +3.01%
Broadcom Corp. (BRCM) $44.12 +2.81%
QUALCOMM Inc. (QCOM) $68.88 +2.77%
Vimpelcom Ltd Ads (VIP) $5.35 +2.69%
Mondelez International Inc. (MDLZ) $36.50 +2.67%
Apple Inc. (AAPL) $126.37 +2.53%
Nasdaq 100 - Fallers
Altera Corp. (ALTR) $42.82 -3.54%
Mylan Inc. (MYL) $60.00 -2.64%
Intel Corp. (INTC) $31.46 -1.69%
Vodafone Group Plc ADS (VOD) $33.22 -0.72%
Discovery Communications Inc. Class A (DISCA) $31.09 -0.58%
Sba Communications Corp. (SBAC) $120.19 -0.46%
Yahoo! Inc. (YHOO) $44.95 -0.33%
Gilead Sciences Inc. (GILD) $100.69 -0.31%
Applied Materials Inc. (AMAT) $22.77 -0.26%
TripAdvisor Inc. (TRIP) $83.63 -0.19%