S&P 500 Extends Record as Gold, Silver Climb on Yellen Remarks

New York (Nov 15)   U.S. benchmark stock indexes extended records on Thursday, while silver and gold rallied as Federal Reserve chairman nominee Janet Yellen said she wants to maintain monetary stimulus until the economy improves. The yen and euro weakened as reports showed slowing economic growth.

The Standard & Poor’s 500 Index gained 0.5 percent to 1,790.62 in New York, an all-time high for a second day. The MSCI All-Country World Index climbed 0.8 percent and the MSCI Emerging Markets Index jumped 1.4 percent, ending a 10-day slump, the longest in seven years. Silver and gold futures rose 1.4 percent to lead commodities higher. Thirty-year Treasury yields slipped three basis points to 3.79 percent. The yen slid against all and the euro versus a majority of 16 major peers.

It’s important that policy makers not remove support for the U.S. economy too soon given the limited range of tools available to the Fed, which has to promote a “very strong recovery,” Yellen said in response to questions after her nomination hearing testimony today. Economic growth slowed in Japan and the euro area last quarter, reports showed, while American jobless claims topped economists’ estimates.

Yellen “sounded awfully dovish and did not give any indication that she’s ready to pull back on the amount of bond buying that the Fed’s doing,” Chris Gaffney, St. Louis-based senior market strategist at EverBank Wealth Management, said in a phone interview. “Equities are looking at more stimulus as a positive.”

‘Surest Path’

The Federal Open Market Committee will probably wait to taper its bond buying to $70 billion at its March 18-19 meeting from current pace of $85 billion a month, according to the median of 32 economist estimates in a Bloomberg survey Nov. 8.

“Supporting the recovery today is the surest path to returning to a more normal approach to monetary policy,” Yellen said in her testimony to the Senate Banking Committee. A “strong recovery will ultimately enable the Fed to reduce its monetary accommodation and reliance on unconventional policy tools such as asset purchases.”