Dow, S&P 500 hit records on Fed testimony

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The Dow and S&P 500 have bolted to fresh records after Federal Reserve chair Janet Yellen pledged a cautious approach to raising interest rates.

The Dow Jones Industrial Average on Tuesday rose 92.35 points (0.51 per cent) to 18,209.19, besting Friday’s record by about 70 points, and the S&P 500 gained 5.82 (0.28 per cent) to 2,115.48.

The tech-rich Nasdaq Composite Index advanced 7.15 (0.14 per cent) to 4,968.12.

Yellen, opening two days of congressional testimony, signalled that the Fed is deep in preparation for a rate hike this year, even as she essentially ruled out the move until June at the earliest.

Yellen said the US labour market still showed cyclical weakness and inflation continued to fall, necessitating significant policy accommodation.

“There was a little something for everybody and no indication that a rate hike is coming soon,” said Art Hogan, chief market strategist at Wunderlich Securities.

European stocks also rose strongly after eurozone finance ministers backed an extension of Greece’s bailout.

London’s FTSE 100 index reached a new record and equity markets in France and Germany also gained.