U.S. stocks are rising Tuesday afternoon as investors were pleased with Federal Reserve Chair Janet Yellen’s testimony before Congress. Energy, technology and phone and energy companies gained. The market was bouncing back from a slump that lasted more than a week.
KEEPING SCORE: The Dow Jones industrial average picked up 54 points, or 0.3 percent, to 17,858 as of 3:35 p.m. Eastern time. The Standard & Poor’s 500 index rose 9 points, or 0.4 percent, to 2,091. The Nasdaq composite added 13 points, or 0.3 percent, to 4,849.
YELLEN TESTIMONY: Federal Reserve Chair Janet Yellen spoke to the Senate Tuesday and said the U.S. economy faces a number of uncertainties that require the Fed to proceed cautiously in raising interest rates. Yellen said the Fed will watch carefully to see if the recent slowdown in job growth is temporary or a sign of a bigger problem. The Fed left interest rates unchanged in June and will meet again in late July. Her testimony will conclude on Wednesday.
THE QUOTE: “The market seems to have responded well to Dr. Yellen’s tone of caution,” said Phil Orlando, chief equity strategist for Federated Investors.
WATCHING BRITAIN: Opinion polls and betting markets indicate that Britons are more likely to vote to remain in the European Union in a referendum Thursday. Uncertainty about the outcome has weighed on global markets, and polls suggest the result will be close.
CHECK YOUR MESSAGES: AT&T added 38 cents to $41.16 and Verizon gained 46 cents to $54.22 as phone companies made larger gains than any other sector of the market.
ENERGY: Benchmark U.S. crude fell 52 cents, or 1.1 percent, to $48.85 a barrel in New York. Brent crude, the benchmark for international oil prices, slipped 3 cents to $50.62 a barrel in London. The price of oil rose about 7 percent over the last two days.
Energy companies climbed despite the dip in oil prices. Orlando expects the price of oil to fall further, but said oil companies will still be able to make money if oil trades between $40 and $60 a barrel. That wasn’t the case earlier this year, when the fuel fell as low as $26 a barrel.
SCIENCE DEAL: American Science & Engineering, which makes X-ray inspection systems, agreed to be acquired by airport security and full-body scanner manufacturer OSI Systems. OSI will pay $37 per share, or $263.9 million. American Science & Engineering’s stock jumped $4.46, or 13.8 percent, to $36.80.
WERNER WARNING: Transportation and logistics company Werner Enterprises forecast disappointing second quarter results. It said sluggish freight market conditions are hurting rates, as are the costs associated with an increase in pay for drivers. The stock lost $2.35, or 9.5 percent, to $22.33. Truck leasing company Ryder System lost 92 cents, or 1.4 percent, to $65.41.
TAP THE BRAKES: Used car dealership CarMax disclosed disappointing first-quarter results as its costs increased and sales fell short of Wall Street estimates. Its stock gave up $2.34, or 4.6 percent, to $48.29. Auto retailer AutoNation fell $1.38, or 2.8 percent, to $47.98 and auto supplier BorgWarner skidded $1.36, or 3.9 percent, to $33.37.
IMPAX SLACKENS: Generic drug maker Impax Laboratories tumbled after it agreed to pay $586 million for a group of generic drugs owned by Allergan and Teva Pharmaceutical Industries. Those companies had to sell the products because Allergan is buying Teva’s generic drugs business. Impax lost $3.41, or 10.7 percent, to $28.56.
IMPERVIOUS: Data security software company Imperva climbed $5.38, or 13.3 percent, to $45.82 after Elliott Capital, the firm run by activist investor Paul Singer, disclosed a stake.
METALS: The price of gold dropped $19.60, or 1.5 percent, to $1,272.50 an ounce and silver fell 20 cents, or 1.1 percent, to $17.32 an ounce. Copper rose 2 cents to $2.12 a pound.
OTHER ENERGY TRADING: Wholesale gasoline rose 1 cent to $1.59 a gallon. Heating oil slipped 1 cent to $1.52 a gallon. Natural gas rose 2 cents to $2.77 per 1,000 cubic feet.
OVERSEAS: Germany’s DAX rose 0.5 percent and France’s CAC 40 advanced 0.6 percent, also adding to large gains on Monday. Britain’s FTSE 100 gained 0.4 percent. Tokyo’s Nikkei 225 rose 1.3 percent and Hong Kong’s Hang Seng added 0.7 percent while Seoul’s Kospi gained 0.1 percent.
BONDS, CURRENCIES: Bond prices fell again as investors felt comfortable taking on riskier investments. The yield on the 10-year U.S. Treasury note rose to 1.71 percent from 1.69 percent. The dollar rose to 104.76 yen from 103.96 yen. The euro fell to $1.1257 from $1.1314. The British pound edged back down to $1.4663 from $1.4693 after a big jump Monday.
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