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Stocks Hit New Highs on Yellen Testimony, Greece Bailout News


Today's financial recap and tomorrow's financial outlook.

US stocks made record highs today as Fed Chair Janet Yellen Janet Yellen testified in front of the Senate Banking Committee and Greece made significant progress in its bailout efforts.

Yellen was upbeat on the domestic economy, but said that the Fed would consider rate hikes "on a meeting by meeting basis". She added that it was unlikely for a rate increase to occur within the next couple of meetings.

The market read Yellen's testimony as an attempt to emphasize the Fed's flexibility in determining the future path of rates. This was read by some as dovish as the June rate hike many traders expect could be off the table, depending upon how economic data shapes up in the meantime.

Greece's bailout extension plan was approved as a valid starting point for negotiations by Eurozone Finance Ministers. Greece promised to exercise greater discipline with fiscal matters including government spending and tax collection.

However, IMF Director Christine Lagarde said that the Greek plan did not contain "clear assurances that the government intends to undertake the reforms envisaged in the memorandum on economic and financial policies.

The S&P 500 made a record high at 2117.94 before finishing at 2115.48, up 0.3%.

The Dow Jones Industrial Average and Russell 2000 also made new record highs.

The 10-Year US Treasury yield rallied on the release of Yellen's prepared remarks, but ultimately fell 7 bps to 1.985%.

Economic data was mixed today.

S&P/Case Shiller home price data for December was above expectations, as was February Markit US PMI numbers.

However, February's Consumer Confidence Index fell to 96.4, which was below the 99.5 consensus economist forecast. Additionally, the February Richomd Fed Manufacturing Index came in at 0, below the 6.0 expected.

In earnings news, Home Depot (HD) beat analysts' earnings and revenue forecasts by a solid margin. It also raised its dividend by 26% and announced an $18 billion share repurchase program. The stock rose 4.0% to $116.75 today. Competitor Lowe's (LOW) rose in sympathy.

Biotechnology stocks were notably weak today following multiple days of outperformance. The iShares NASDAQ Biotechnology Index ETF (IBB) fell 0.8%

Tomorrow's Financial Outlook

Fed Chair Yellen will resume testimony tomorrow at 10:00 a.m. ET tomorrow which could most certainly drive the action.

We also have economic data on the calendar, with the MBA Mortgage Index at 7:00 a.m. ET followed by January New Home Sales at 10:00 a.m and crude oil inventories at 10:30 a.m.

Target (TGT), Lowe's, Transocean (RIG), and (CRM) will report earnings.

Twitter: @Minyanville

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No positions in stocks mentioned.

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