Stocks close at record highs following Yellen's Hill remarks

Jane Onyanga-Omara | USA TODAY

Stocks closed at new highs Tuesday as investors reacted positively to remarks from U.S. Federal Reserve Chair Janet Yellen and Greece won EU approval for its proposed budget reforms.

The Dow Jones Industrial Average rose 92.35 points (0.5%) to 18,209.19, while the Standard & Poors 500 gained 5.82 points (0.3%) to 2,115.48, both eclipsing Friday's record closes.

The Nasdaq composite extended its gains to 10 straight sessions - its longest winning streak since July 2009. The Nasdaq finished up 7.15 points (0.14%) to 4,968.12, leaving the tech-heavy market barometer just 1.6% below its 5,048.62 record close of March 2000.

Yellen, in her semi-annual testimoney before the Senate banking committee, used a word familiar to investors when she reiterated that the central bank will be "patient" on raising interest rates for the first time since the 2008 financial crisis. Traders took that as a sign that interest rates would remain unchanged until autumn.

Yellen said that while the U.S. economy has improved, she noted that overseas economies remain weak, inflation is still below the Fed's 2% target rate and wage growth remains tepid.

Yellen's dovish tone touched off a rally in U.S. Treasuries, with yields on 10-year notes falling to 1.98.7% from 2.057% Monday. Yields on two-year Treasuries fell from 0.61% Monday to 0.561%.

Among U.S. stocks, retailer Home Depot rose $4.47 (4%) to a record $116.75 close after posting an 18% gain in quarterly profits and hiking its stock dividend 26%. Among other Dow 30 components, General Electric rose 1% to $25.39 and JPMorgan rose 2.5% to $60.82.

Internet college textbook retailer Chegg surged $1.85 (27%) to $8.60 after reporting quarterly results that beat Wall Street estimates, while private label beverage marketer Cott bubbled up 17% to $9.31 on strong fourth-quarter results.

In Asia, Japan's Nikkei 225 index gained 1%, while Hong Kong's Hang Seng index dropped 0.4%.

European stocks posted gains, with Britain's FTSE 100 rising 0.5% to 6,949.63, Germany's DAX adding 0.7% to 11,205.74 and France's CAC 40 rising 0.5%.

Greece's ASE index skyrocketed 8.7% after the government submitted the list of reforms and EU officials gave their OK Tuesday.

Greece's left-wing government delivered a list of reforms to Brussels on the cusp of Monday night's deadline, after the country and its creditors reached a tentative agreement last week to extend a rescue loan program by four months to avoid the risk of a Greek default and exit from the euro currency. Greece's loans were originally due to expire on Feb. 28.

A Greek government official said the reforms would focus on curbing tax evasion, corruption, smuggling and excessive bureaucracy while also addressing poverty caused by a six-year recession.

Contributing: Associated Press.