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Stock Market Closes at 2016 High After Yellen News
(NEW YORK) -- Stocks closed at their highest level of the year Tuesday as investors welcomed the
latest signal from the Federal Reserve that it will move slowly to raise interest rates. Big names
including Apple and Microsoft led technology stocks higher as the market made its biggest gain in
two weeks.
Stocks rose after Yellen confirmed that the Fed isn't in a hurry to raise interest rates. The Fed made
similar points just two weeks ago, but since then, some members of the Fed's decision making
committee had said they thought it was time for rates to go higher. Yellen's remarks boosted all
corners of the market, and the price of gold rose along with stocks. Bond prices also rose and yields
sank.
"A little bit of self-doubt started to enter the trading public's mind," said Sam Stovall, U.S. equity
strategist for S&P Capital IQ. "She reassured investors."
on lending when interest rates are higher, so the Fed's low-rate policy has hurt the sector. So has
the weakening price of oil, because investors are worried that loans to energy companies won't be
repaid.
Bank of America fell 20 cents, or 1.5 percent, to $13.42 and Wells Fargo lost 65 cents, or 1.3
percent, to $48.05.
In her remarks to the Economic Club of New York, Yellen said the Fed expects to move slowly
because the U.S. economy and financial conditions have weakened over the last few months, and
global pressures could harm the U.S. economy. Those concerns include the possibility of a broad
economic slump, lower oil prices, and the shaky stock market.
The Fed cited similar reasons earlier this month, when it said it expected to raise rates twice this
year, not four times.
Benchmark U.S. crude dropped $1.11, or 2.8 percent, to $38.28 a barrel in New York. Brent crude,
used to price international oils, lost $1.13, or 2.8 percent, to $39.14 a barrel in London.
Home building companies rose after Lennar reported strong quarterly results, selling more homes at
higher prices. Its stock gained $1.48, or 3.2 percent, to $48.18. Competitor D.R. Horton rose 90
cents, or 3 percent, to $30.72 and PulteGroup added 39 cents, or 2.2 percent, to $18.51.
Drugmaker Medivation fell after a group of legislators took aim at the company over the price of its
prostate cancer treatment Xtandi. They urged federal agencies to cut the price of Xtandi and asked
for public hearings. Xtandi is Medivation's only approved drug, and its average list price is about
$129,000 a year. Sales topped $1 billion last year. Medivation stock shed $2.50, or 6.1 percent, to
$38.75.
Retailer Conn's skidded $3.84, or 24.5 percent, to $11.81 after its quarterly profit came up short of
estimates and its 2016 forecasts disappointed investors.
In other commodities trading, heating oil fell two cents to $1.16 a gallon. Natural gas rose 3 percent
to $1.90 per 1,000 cubic feet. Silver picked up 4 cents to $15.23 an ounce. Copper prices slumped 3
cents, or 1.4 percent, to $2.21 a pound.
Overseas markets were mixed. France's CAC 40 added 0.9 percent and Germany's DAX picked up
0.4 percent. The FTSE 100 index of leading British shares was little changed. Japan's benchmark
Nikkei 225 lost 0.2 percent and South Korea's Kospi added 0.6 percent. Hong Kong's Hang Seng
gained 0.1 percent.
http://time.com/4275626/stock-market-record-year-high/