12:05 PM New York – U.S. indexes extended gains and S&P 500 index traded in a record territory. For the year so far, the S&P 500 index is up 25.4%. European markets jumped 1% after investors surmised Federal Reserve to keep in place its large bond buying program. Starbucks agreed to pay $2.79 billion in damages to Kraft.
U.S. stocks traded higher after comments from Fed Vice Chairman lifted investor sentiment.
The presumed Fed Chairman Yellen said at a hearing to lawmakers that the U.S. economy is performing below its potential.
“A strong recovery will ultimately enable the Fed to reduce its monetary accommodation and reliance on unconventional policy tools such as asset purchases,” Yellen said in testimony for her nomination before the Senate Banking Committee.
She added, “Supporting the recovery today is the surest path to returning to a more normal approach to monetary policy.”
Most economists believe that Fed will begin tapering its bond buying program to $70 billion from $85 billion a month at the March meeting.
Weekly initial jobless claims decreased 2,000 to 339,000 from a revised 341,000 in the previous week, the Labor Department said today.
U.S. Stocks in Review
) plunged 12% after the company reported slight increase in sales and earnings in the fiscal first-quarter.
The networking equipment giant also estimated lower-than-expected sales and earnings in the current quarter and the company said it has lowered prices for its switches and routers due to competitive pressures.
Office Depot (ODP
) gained 1.5% and the company appointed Roland Smith as chief executive officer after it completed its merger with Office Max.
) gained 1% and Mondelez added 2.7% after the coffee retail chain agreed to pay arbitration award.
Starbucks agreed to pay $2.79 billion in damages to Mondelez to settle a coffee distribution agreement termination.
The dispute began in 2010 when Mondelez rejected $750 million offer from Starbucks to relinquish the control of its packaged coffee distribution through grocery chains.
According to the latest quarterly report, Starbucks sale of packaged tea and coffee in grocery chains increased 50%, surpassing 14% growth across the company, on the surge in sale of single-serve-K-Cup packs.
Kraft, the parent of Mondelez, at the time of contract termination in November 2010, said Starbucks grocery retail business has grown to $500 million in annual revenue from $50 million.
Tyco International (TYC
) increased 2% after fire detection and security services provider reported better-than-expected quarterly sales.