REUTERS/Kevin LamarqueU.S. Federal Reserve Chair Janet Yellen holds a news conference at the Federal Reserve in Washington December 17, 2014.
Fed Chair Janet Yellen spent a second day on Capitol Hill, as the Dow remained on pace to climb to its best month since October 2011.
First, the scoreboard:
- Dow: 18,223.9, +14.7, (+0.1%)
S&P 500: 2,113.8, -1.7, (-0.1%)
- Nasdaq: 4,967.1, -1, (-0.02%)
And now, for the top stories on Wednesday:
- Fed Chair Janet Yellen spent her second and final day on Capitol Hill. After repeating yesterday’s prepared remarks, which emphasised that the Fed will give the market forward guidance before it raises rates, she fielded questions from lawmakers. Yellen repeated that she strongly opposes Audit the Fed. In response to a question about the Taylor Rule, she again emphasised that monetary policy changes should not be subject to rigid rules. And when asked about inequality, Yellen said many of its causes are structural, and a strong labour market would make it easier and faster for unemployed workers to find jobs.
- In economic data, the pace of new home sales in January fell less than expected. Sales dropped 0.2% to an annualized rate of 481,000 units, slightly beating economists’ estimates of 470,000 units. “The January report was positive, in our view, and suggests an improving trend in new home sales,” Barclays’ Blerina Uruçi said after the release. “The data support our view that the housing market remains in recovery mode and that activity for the rest of the year is likely to improve at a modest, albeit choppy, pace.”
- We got another signal of the labour market recovery, as TJX, owner of TJ Maxx, Marshalls, and Home Goods stores, announced that it will raise minimum hourly wages for full- and part-time workers to $US9.00 as from June. By the end of 2016, all hourly employees that have been with either of the three companies for over six months would earn a minimum of $US10 per hour. TJX follows Wal-mart’s, which announced last week that it would raise its workers’ minimum wage to $US9 in April and $US10 by 2016.
- American Express cardholders got more bad news, as the company confirmed that over 1 million customers will see their Annual Percentage Rates rise by at least 12.99% in annual rates, a 2.5% increase on average. An American Express spokeswoman told Business Insider that for customers with APRs significantly below market rates, their rate increase may not be to as much as 12.99% but to a lower level, depending on their current rate.
- Shares of Hewlett-Packard tumbled on Wednesday after the company said foreign currency movements will hurt its earnings. Shares fell up to 10%. Third quarter earnings, reported Tuesday, were in line with investors’ expectations, at $US27.6 billion in revenues, and 89 cents per share. The company said it could lose as much as $US3.3 billion in revenue, or $US1.5 billion in operating profit.
- Shares of Lending Club also continued heading lower after the company’s first earnings release since it went public. Shares fell as much as 14% after Tuesday’s report, which showed fourth quarter earnings of $US0.01, missing expectations for earnings of $US0.02. Revenues totaled $US69.6 million, up from $US33.5 million for the same period last year.
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