Brendan Mcdermid / REUTERS
Traders work on the floor of the New York Stock Exchange.
Speaking at a conference in Arlington, Va., Bernanke said the U.S. economy needs to grow more quickly if it is to produce enough jobs to bring down the unemployment rate further. Instead of taking them as negative, investors saw Bernanke’s comments as evidence that the central bank is prepared to keep the cost of borrowing low, and that news boosted stocks across the board.
“Clearly, Bernanke is trying to tamp down expectations,” said Hugh Johnson, chief investment officer of Hugh Johnson Advisors in Albany, N.Y.
“To some, he seems to be suggesting that it’s very hard to reconcile the good news on employment with the performance of the economy,” he added. “So we may need more stimulus.”
Monday’s rally drove the market’s main stock indexes to their best gains in weeks. The market is now in track for its best first quarter since 1998, according to CNBC.
The Dow Jones industrial average closed the day with a gain of 161 points, or 1 percent, finishing just 11 points below its highest close of the year, seen on March 15.
The broader Standard & Poor’s 500-stock index surged 19 points, or 1,4 percent, to its highest close since May 2008, while the Nasdaq composite index jumped 55 points, or 1.8 percent, and hit a multi-year high. The tech-laden index has now risen for six straight weeks.
The healthcare sector was the strongest performer of the day, as the U.S. Supreme Court on Monday as justices began hearings on President Barack Obama’s signature healthcare law.
Improving sentiment about the pace of economic growth has kept investors piling into equities so far this year, and investors and market watchers offered other reasons for the market’s continued strong performance Monday.
One put forward in The Wall Street Journal is that, as the debt debacle in Europe continues to fade and investors put the financial crises of recent years behind them, investors are taking on more risk instead of fixating on safe investments, such as bonds.
And Bloomberg News noted that hedge funds trailing the S&P 500-stock index over the last five months are giving up on bearish bets and buying stocks at the fastest rate in two years.
On the U.S. economic front, pending home sales slid 0.5 percent in February, according to the National Association of Realtors, confounding expectations for a rise of 1 percent. Equities were little impacted by the data.
Shares of Lions Gate Entertainment Corp rallied after the strong opening to its film "The Hunger Games," which made $214 million over the weekend globally.
Cal-Maine Foods Inc reported third-quarter earnings that fell from the prior year on rising feed costs, which the company sees persisting through the summer.
BATS Global Markets Inc on Sunday apologized for a system failure that caused shares in its own initial public offering to erroneously trade for less than a penny on Friday and resulted in Apple Inc's shares being temporarily halted.
BATS Chief Executive Joe Ratterman called the incident a "devastating moment," and said the company's withdrawn IPO was on hold "for the foreseeable future.
Reuters contributed to this report.
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