After the testimony by Janet Yellen, the Federal Reserve Chairwoman, yesterday, U.S. stocks advanced with the Dow Jones and the S&P 500 closing at record highs. Investors responded positively to Yellenâ€™s dovish reassurance that rate hikes will not take place until the second half of 2015. As a result, at the close of trading, the Dow Jones Industrial Average (DJIA) advanced 0.5%, or 92.35 points, to end at 18,209.19. Also on the upside was the S&P 500 index (SPX) which closed 0.3%, or 5.82 points, higher at 2,115.48. The tech-heavy Nasdaq Composite index (COMP) was also on the upside adding 0.1%, or 7.15 points, to end at 4,968.12. The Nasdaq has advanced now for 10 sessions in a row marking this the longest winning streak for the index since June 2009 where it rose for twelve straight days. The index is now off its March 2000 peak by only 1.6 percent. Also, the CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down to 13.70, down 5.91 percent.
In response to weak consumer confidence data out of the United States as well as comments by Federal Reserve Chair Janet Yellen that rate hikes are currently on hold, the U.S. dollar (USD) trimmed gains against most major currencies. In their report, the market research group, the Conference Board, showed that the consumer confidence index declined to 96.4 in February, down from a reading of 103.8 in January. This missed analystsâ€™ expectations for a decline to 99.6 in February. Also, in her testimony to the Senate Banking Committee yesterday, Yellen stated that it was â€˜unlikelyâ€™ that rate increases will occur for â€˜at least the next couple of FOMC meetingsâ€™. In Forex trading, the EUR/USD held steady at 1.1337 while the greenback traded higher against the Japanese yen with USD/JPY at 119.06, up 0.21%. Also, the USD/CHF held steady at 0.9494 while the GBP/USD was little changed at 1.5453. The U.S. dollar index was also steady at 94.65.
After the market closed on Tuesday, Hewlett-Packard Co (N:HPQ) reported earnings for the January quarter which failed to meet expectations by declining 4 percent. As a result, HP shares traded at $35.90, down 6.7%. In October last year when the company announced the intended split of their company, HP shares rose 9.3% to trade $38.49. According to HP, the 4% decline in earnings came as a result of poor desktop computer sales. Also, as a result of the strong U.S. dollar (USD), the quarterly revenue in all of HPâ€™s operating units was well below analysts' expectations. In the year ended October 2014, two-thirds of HPâ€™s revenue came from outside the United States and in the last six months, the greenback has risen by 14.7%. For the fiscal first quarter ended January 31, Hewlett-Packard reported a profit of 73 cents a share, or $1.37 billion. This was down from 74 cents a share a year earlier or $1.43 billion. Also, excluding certain items, per-share earnings rose from 90 cents to 92 cents while HP had guided for 89 cents to 93 cents a share. In terms of revenue, the No.2 PC maker reported a decrease to $26.84 billion, down 5 percent which missed expectations of $27.34 billion in revenue.
After an industry report in the U.S. showed an increase in crude oil stocks in the country, crude oil prices still increased slightly on Wednesday in early Asian trade. According to the report by the American Petroleum Institute, crude oil stocks increased by 8.9 million barrels last week, while gasoline supplies declined 1.6 million barrels and distillate holdings fell by 2.4 million barrels. Today, investors are waiting for the stock pile report from the Department of Energy in the U.S. Crude oil for April delivery traded at $49.30 a barrel, up 0.04 percent on the NYMEX. Meanwhile, Brent oil for delivery in April traded at $60.09, up 2.01%, or $1.19, on the ICE Futures Exchange in London.