NEW YORK: US stocks closed higher and the S&P 500 index briefly crossed the 3,000-point mark for the first time on Wednesday as remarks by Federal Reserve Chairman Jerome Powell reassured investors about the potential for an interest rate cut later this month.
The Dow also hit an intraday record while the Nasdaq closed at an all-time high following the release of prepared remarks for Powell's testimony before the U.S. House of Representatives Financial Services Committee.
Powell said the central bank stands ready to "act as appropriate" to support record U.S. economic growth.
The S&P 500 breached the 3,000-mark just after the opening, but ended slightly below that level at 2,993.07 points. Some investors said the breach may boost confidence in a market that has been breaking to record highs this year.
Other market watchers, however, were less certain.
"On balance, investors live by the credo: 'Don't fight the Fed,' and if rates are being cut - whatever the reason - they have often stood by stocks so I'm not surprised we're making new highs," said Rick Meckler, partner, Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
"But it's a market that's come an awfully long way. And I think you're running out of investors willing to put too much new money in without some indication that earnings can stay strong."
Amazon.com, Microsoft Corp and Apple Inc were among the biggest boosts to the indexes.
The Dow Jones Industrial Average rose 76.71 points, or 0.29%, to 26,860.2, the S&P 500 gained 13.44 points, or 0.45%, to 2,993.07 and the Nasdaq Composite added 60.80 points, or 0.75%, to 8,202.53.
In his testimony, the first installment of two days on Capitol Hill this week, Powell pointed to "broad" global weakness that was clouding the U.S. economic outlook amid uncertainty about the fallout from the Trump administration's trade dispute with China and other key economies.
Stocks briefly added to gains following minutes from the last meeting of Fed policymakers that showed many U.S. central bank officials thought more stimulus would be needed soon if risks to the economy did not let up.
The S&P 500 index of financial shares including banks, which tend to benefit in a higher interest rate environment, retreated 0.5% after Powell's comments.
Investors say much of this year's gain for stocks has stemmed from a change in outlook for the Fed to be more dovish on interest rate policy.
"The recent rally is speculation on the Fed lowering interest rates to continue to perpetuate this amazing recovery we've had. In Powell's testimony today, he referenced that quite often - that the Fed's job is to perpetuate this recovery by achieving full employment and controlling inflation, and they've done both," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.
"I'd say that's what's dominated the market over the past month or so."
Advancing issues outnumbered declining ones on the NYSE by a 1.92-to-1 ratio; on Nasdaq, a 1.19-to-1 ratio favored advancers.
The S&P 500 posted 73 new 52-week highs and two new lows; the Nasdaq Composite recorded 99 new highs and 43 new lows.
Volume on U.S. exchanges was 6.38 billion shares, compared to the 6.72 billion average for the full session over the last 20 trading days. - Reuters
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