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Market Update 070214
http://biz.yahoo.com/mu/update.html

4:20 pm : Stocks rallied Wednesday as a lack of overly hawkish commentary from Fed Chairman Bernanke eased the worst of fears about a possible rate hike.

Speaking before the Senate Banking Committee, Bernanke stated that "inflation pressures are beginning to diminish." He also said the Fed remains comfortable with rates at their current levels, easing recent concerns about the prospect of another rate hike and painting the goldilocks scenario the bulls were hoping for. While Bernanke didn't call for any policy easing, after also alluding to further rate hikes if pricing pressures fail to ease as expected, his overall upbeat tone on both the economy and cooling inflation pressures diminished the likelihood for a continued push higher on policy rates.

Such a steady policy outlook, which is consistent with Briefing.com's assessment, renewed optimism about the market's growth prospects and fueled a rally in equities that closed all 10 sectors higher on the day and pushed several indices into uncharted territory. The Dow Jones Industrials, Transportation and Utilities Averages all finished at historic highs.

From a sector standpoint, Industrials turned in the day's best performance. Bernanke noting "the current stance of policy is likely to foster sustainable economic growth" was the initial spark luring investors back to the economically-sensitive sector. Deere & Co (DE 111.91 +9.24) soared 9% to an historic high after handily topping Wall Street expectations and was the sector standout.

Bernanke also attributing part of the "gradual ebbing of core inflation" to declines in oil prices allowed transports to take full advantage of a 1.7% sell-off in crude. CSX Corp (CSX 42.10 +2.73) surged 7% to an all-time high, getting an additional boost after announcing a $2 bln buyback, while an analyst upgrade gave FedEx (FDX 117.58 +4.04) an extra lift.

The Energy sector's resilience in the face of oil's downturn further underscored the market's eagerness to own equities today. Crude for March delivery closed near $58/bbl after the Energy Dept. earlier showed that weekly inventories remain adequate to meet demand.

Turning in the day's second best performance, though, was the even more influential Technology sector. After snapping an eight-day losing streak a day earlier, Microsoft (MSFT 29.40 +0.37) built on yesterday's gains to the tune of a 1.3% advance. Intel (INTC 21.14 +0.24), the only other stock listed on all three major averages, also turned in an impressive performance (+1.2%). Since higher interest rates spark valuation concerns among growth stocks, the Bernanke-induced rally in Treasuries pushing yields lower across the board also helped to restore confidence throughout the struggling tech sector.BTK +0.9% DJ30 +87.01 DJTA +2.1% DJUA +0.4% DOT +1.3% NASDAQ +28.50 NQ100 +1.8% R2K +0.2% SOX +2.1% SP400 +0.7% SP500 +11.04 XOI +0.5% NASDAQ Dec/Adv/Vol 1250/1786/2.12 bln NYSE Dec/Adv/Vol 1116/2161/1.46 bln

10:00 am : Little changed since the last update as the major averages settle into a holding pattern ahead of Bernanke's upcoming testimony. Meanwhile, the indices remain on the offensive, but gains are modest at best while leadership from the eight sectors trading higher is largely attributed to just Technology and Industrials.

The latter is getting a boost from an analyst upgrade on FedEx (FDX 115.74 +2.20) while Deere & Co (DE 108.25 +5.58) opened at a historic high after handily topping Wall Street expectations. Tech is getting its biggest boost from Semiconductor Equipment, which is today's second best performing S&P industry group (+1.9%) as investors applaud Applied Materials' (AMAT 18.70 +0.51) healthy interim profit growth and upbeat Q2 guidance.DJ30 +14.27 NASDAQ +10.04 SOX +0.6% SP500 +2.91 NASDAQ Dec/Adv/Vol 1142/1336/184 mln NYSE Dec/Adv/Vol 1123/1567/82 mln

09:40 am : Decent follow-through seen in stocks, as the indices open on an upbeat note. Strong quarterly reports from Dow component Coca-Cola (KO 48.21 unch) and tech giant Applied Materials (AMAT 18.66 +0.47) are contributing to the market's positive disposition. However, with the bulk (nearly 80%) of the S&P 500 having already reported quarterly results, the focus has shifted from earnings to the general economic outlook, which places added emphasis on day one of Fed Chairman Bernanke's semi-annual testimony before Congress (10:00 ET).

Separately, investors have also sifted through a notable economic report this morning. January retail sales came in a bit soft, but not far from expectations given upward revisions to December and not weak enough to rule out the possibility of Bernanke's upcoming remarks suggesting the next move in rates will be higher. DJ30 +19.55 NASDAQ +11.22 SP500 +3.23 NASDAQ Vol 84 mln NYSE Vol 48 mln

09:15 am : S&P futures vs fair value: +2.5. Nasdaq futures vs fair value: +7.0.