Wall Street Shatters Records, Fed Comments Boost Bank Stocks

Wall Street Shatters Records, Fed Comments Boost Bank Stocks

Major US stock indexes shot to new highs today. Bank stocks led the charge, fueled by Federal Reserve Chair Janet Yellen's remarks about raising interest rates sooner rather than later.

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Treasuries fell, US stocks added to records and the dollar rose after Janet Yellen said gains in consumer spending, household income and American wealth are sustaining economic growth that may warrant higher interest rates. Wall street took that news - combined with other good economic news - to send the markets toward the stratospheres. 

The Dow Jones Industrial Average rose 91.43 points, or 0.45 percent, to 20,503.59, the S&P 500 gained 9.21 points, or 0.40 percent, to 2,337.46 and the Nasdaq Composite added 18.62 points, or 0.32 percent, to 5,782.57.

Federal Reserve Chair Janet Yellen sounds like she’s on a mission to raise interest rates this year -- no matter what President Donald Trump does on tax cuts and spending. In a clarifying point during Senate questioning on Tuesday, Yellen said her monetary policy panel doesn't need to wait for the Trump’s administration’s plans on fiscal stimulus to hike rates. It’s a subtle but important switch from a year ago, when the Federal Open Market Committee started with a plan for four rate hikes, and was already worrying by March about the state of the global economy. In the end, they hiked a single time, in December.

Goldman Sachs Group Inc. closed at a record high for the first time since before the financial crisis, as banks rallied after the Federal Reserve chair said waiting too long to raise rates could disrupt financial markets. Four major American equity benchmarks closed at unprecedented levels for a second day, while the yield on the 10-year Treasury note added four basis points and the dollar strengthened. 

Apple Inc. shares hit an intraday record high on Tuesday for the first time in almost two years as investors raised bets that a 10th anniversary iPhone will boost lackluster sales. The stock was up 1.2 percent at $134.91 in afternoon trade, beating its previous intraday high of $134.54 set on April 28, 2015. Tuesday's all-time high for the stock followed a record high close the day before and was seen as adding to the stock's momentum.

Oil rose 0.5 percent to settle at $53.20 a barrel, rising for the fourth time in five days. Investors are weighing rising US crude stockpiles against output cuts from OPEC and other producing nations.

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