U.S. stocks advanced on Wednesday after Federal Reserve Chairman Ben Bernanke reaffirmed his commitment to keep interest rates low for an extended period.
Bernanke told a House committee that a weak job market and low inflation would likely allow the central bank to keep rates low, easing concerns that rates could climb sooner than thought. Much of last year's equities rally was driven by ultra-low interest rates that made stocks more attractive.
The Fed is going keep rates low for an extended period. By keeping that language, that's what helping the markets, said John Canally, investment strategist at LPL Financial in Boston.
The Dow Jones industrial average <.DJI> gained 83.82 points, or 0.82 percent, to 10,366.23. The Standard & Poor's 500 Index <.SPX> added 8.40 points, or 0.77 percent, to 1,103.00. The Nasdaq Composite Index <.IXIC> rose 21.36 points, or 0.97 percent, to 2,234.80.
In worrying news from the housing market, the government said sales of newly built U.S. single-family homes fell to a record low in January.
Homebuilder stocks declined. D.R. Horton Inc
It's awful. This is with the homebuyer tax credit. I don't understand people who say the housing market is turning. This number tells you housing is dead still, said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.
Technology and banking stocks were among the biggest gainers. The S&P technology sector index <.GSPT> rose 1.2 percent, while the BKW bank index <.BKX> gained nearly 2 percent.
(Reporting by Edward Krudy; Additional reporting by Ellis Mnyandu and Richard Leong; editing by Jeffrey Benkoe)