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Photo: Shelley Panzarella via Flickr

Stocks relinquished gains in the last hour after hawkish signs from the Federal Reserve.But first, your scoreboard:

Dow: 12,461; +46 pts; +0.37%
S&P 500: 1,315; 0 pts; -0.01%
NASDAQ: 2,831; -14 pts; -0.48%

These were the day’s top stories:

  • European stocks rallied across the board today, led by the Italian FTSE MIB which rose 0.88 per cent. The euro rallied during the day, topping $1.26.
  • Janet Yellen, Vice Chair of the Federal Reserve Board of Governors, told attendees at a Boston Economic Club dinner last night that “a highly accommodative monetary policy will be needed for quite some time to help the economy mend,” fanning the flames of excitement over a new round of quantitative easing. Here’s The Full Presentation Where Janet Yellen Makes The Case For More QE >
  • Initial jobless claims narrowly beat expectations of 378K, falling to 377K last week. Older data was revised higher, however. DEAR AMERICA: You Should Be Mad As Hell About This [CHARTS] >
  • Federal Reserve Chairman Ben Bernanke testified in front of the Senate today, affirming the Federal Reserve’s readiness to act but taking a more hawkish stance on the likelihood of easing than investors had been expecting.
  • Financial sector sources cited by Reuters said that the IMF will probably assess shortfalls in the Spanish banking system at about €40 billion ($50 billion) in a report that will be published Monday. That report will be crucial to determining the extent of possible EU aid to Spain and its banks. The 20 Countries With The Highest Probability Of Default >
  • Fitch Ratings slashed Spain’s credit rating by three notches, from A to BBB, based on concerns about the likelihood of a bank bailout, deteriorating economic conditions, and a Spanish government that is increasingly unable to stem the tide of the crisis. NOW: Here Are 14 Reasons Spain Is Turning Into A Disaster >
  • Consumer credit data for April missed expectations, expanding by $6.515 billion rather than the $11.0 billion analysts expected. Earlier estimates for credit growth were also revised way down, from a prior reading of $21.355 billion to a final reading of $12.368 billion for March.
  • The Federal Reserve’s Dennis Lockhart marched back from earlier statements suggesting he supported new easing measures, telling Dow Jones, “I don’t think conditions warrant them at the moment. The Buzz Is Growing That World Leaders Will Fire Off A Globally Coordinated Bazooka >
  • Gold tumbled 2.7 per cent after signs that the Fed might not ease monetary policy this month.
  • BONUS: MIT Kids Think They’ve Solved How To Get Rid Of Nuclear Waste >

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