LONDON (ShareCast) – Dow Futures pointed to a broadly flat open on Wall Street as market participants prepare for the second day of Federal Reserve Chair Janet Yellen’s testimony to US lawmakers in Capitol Hill. Both the front month futures contracts for the Dow Jones Industrial Average and S&P500 were indicating a steady start to the session before Yellen takes the mic.
In Tuesday’s testimony, Yellen downplayed fears of early rates rises, staying away from hinting on possible interest rate hikes by saying the central bank will assess the conditions on a meeting-by-meeting basis.
“A fairly balanced tone from Yellen, with a case to be made that it neither favours the hawks nor the doves and instead leaves the Fed in a position of flexibility with no particular bias either way as of right now,” said Deutsche Bank (LSE: 0H7D.L – news) ‘s strategist Jim Reid.
In terms of Tuesday’s market reaction, the S&P 500 recorded a fresh record high after closing up 0.28% whilst the DJIA added 0.51% to also mark a fresh record high.
US Treasury yields rallied across the board with 10-year yields widening 4 basis points immediately following the speech, before then rallying into the close. At the same time, the US dollar rose against its counterparts, as currency traders interpreted Yellen’s comments as broadly dovish.
In company news, electronics retailer Target (NYSE: TGT – news) reported a pre-tax loss of $ 5.1b, including an impairment charge, at its Canadian operations.
Department store chain Macy’s reported a 2% rise in sales in the holiday shopping quarter, falling short of analysts’ estimates. Tech giant Hewlett Packard (NYSE: HPQ – news) posted first-quarter earnings of 92 cents per share, up 2% from a year ago, beating analysts’ expectations. On the economic data menu, attention will be on US new home sales data for January.