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Market Update

Yellen Policy Commitment Supports Markets Advance, Import Price Index Falls

Author: Nichole Harper
Last Update: 10:54 AM ET November 15 2013

10:50 AM New York – U.S. stocks extended gains and broader indexes advanced to new highs as Fed Chairman nominee Janet Yellen supported the easy monetary policy continuation. Import price index in October declined at the fastest pace in a year. Euro zone inflation dips to annual rate of 0.7%.

U.S. stocks turned higher in the first hour of trading as investors look for a continuation of easy monetary policy under a new leadership.

S&P 500 index gained 2.54 to 1,793.16 and the Nasdaq Composite Index increased 2.66 to 3,975.40.

Yellen to Continue Easy Money Fed Policy

Janet Yellen, Fed Chairman nominee to succeed Ben Bernanke, in her Senate Banking Committee assured lawmakers of the continuation of monthly bond purchase program.

Yellen also rejected the notion that the recent rise in stock and real estate prices are at a bubble level and added “we don’t see a broad buildup in leverage, where the development of risks that I think at this stage poses a risk to financial stability.”

Yellen held her ground during a two-hour questioning from senators and evaluated her comments on “Too Big to Fail” and quantitative easing or money printing, free money and continued bond buying program.

Yellen stressed that benefits outweigh the costs in bond buying program and the best way to tackle income inequality is to support job market recovery.

The banking committee is planning to vote on Yellen nomination as early as next week, according to sources in Washington, D.C.

Import Price Index Falls

U.S. industrial production declined 0.1% in October and capacity utilization decreased 0.2 percentage point to 78.1%. Federal Reserve reported.

Import price index declined at the fastest pace in a year and fell 0.7% in October from the previous month, the Labor Department said today.

The fall matched the decline in April and was the largest since June 2012.

The monthly decline was driven by the 3.6% fall in petroleum costs from September, the largest monthly decline since June 2012.

Euro Zone Inflation Dips to 0.7%

European markets trimmed early advance after the U.S. trading hours began and investors digested the latest inflation data.

In London, FTSE 100 index increased 0.2%, in Frankfurt the DAX index gained 0.07% and in Paris CAC 40 index increased 0.15%.

Annual rate of inflation in the euro zone was 0.7% in October, Eurostat said in a report released today.

The latest inflation rate was the lowest monthly rate since November 2009 and the reading played a key role in the European Central Bank’s decision to lower its reference rate last week.

Asian Markets Advance

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc