US stocks rose further as home sales data and positive company news boosted stocks above their previous record highs. Retailers rallied and utilities were lower. From the fundamental side, it seems that Janet Yellen’s words on the recovery pace were heard and understood by the market. Fed lowering purchases didn’t stop markets from recovering after small correction that occurred when Fed’s tapering strategy looked as if it could hurt emerging markets. After some decades, it seems growth dynamics may be shifting back to the developed world.
Buyback plan announcements lifted Lowe and Abercrombie & Fitch which rallied more than 5 percent on the news. Target Corp also gained 5 percent on beating analysts’ forecasts on profit. RBC Capital Markets recommended LinkedIn shares, which boosted them 2.9 percent. First solar tumbled after reporting 58 percent decline in net income. The stock fell 11 percent.
S&P 500 rose 0.25 percent at 16:45 GMT, to 1849.74. The gauge advanced above its closing high of 1848.38 each day of this week, but closed lower. Volume was 5.3 percent lower than 30 day average. DJIA added 0.26 percent to 16,221.43. The lost territory during the mid-February turbulence was recovered and stocks are back at the levels seen at the beginning of 2014. Harsh weather was visible in the macro data, but since it is temporary, stocks didn’t budge much. Stocks are up 6.3 percent since the February 3 low as investors grasped the underlying causes of weak macro data. They were further bolstered by Janet Yellen’s comments from the congressional hearing where she indicated she believes the recovery is on the firm footing. S&P 500 rose more than 170 percent since 2009 bottom.
ETFs are drawing more inflows as S&P 500 trades at record levels. After loosing billions in the mid-February, equity ETFs saw inflows of $3.9 billion yesterday. ETF flows were volatile during the correction, but shallowness of the fall indicated that most of the bulls were holding positions believing that the worst will soon be over. Stocks were boosted by new home sales data which came at 468K annualized in January, exceeding projections ad recovering to July 2008 levels.