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Dow Closes at Record as Powell Again Says Economy Needs Support

Stocks end higher after Federal Reserve Chairman Jerome Powell reiterates the central bank will continue its support of the U.S. economy.

Stocks on Wednesday broadly rose, with the Dow Jones Industrial Average closing at a record, after Federal Reserve Chairman Jerome Powell reiterated the central bank will continue its support of the U.S. economy.

The Dow finished up 424 points, or 1.35%, to 31,961, and also set an intraday record. The S&P 500 finished up 1.14% and the tech-heavy Nasdaq rose 0.99%.

Bond yields surged after Powell's pledge of continued economic support.

The 10-year Treasury yield traded at 1.381% on Wednesday, but had risen earlier to 1.435%, the highest since February 2020. Thirty-year yields reached 2.25%, the highest since January 2020.

Powell reiterated to lawmakers Wednesday that the central bank was a long way from scaling back its ongoing economic support.

The Fed chief also said interest rates would remain low as he noted the economic recovery “remains uneven and far from complete.” Powell signaled the central bank won't soon begin tapering the $120 billion of bonds it has been buying per month until "substantial further progress" was achieved.

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Powell said higher bond yields reflected investors' confidence in an economic recovery, not concern about inflation. Powell said the Fed does expect inflation to rise but central bank has “the tools to deal with it.”

Powell was speaking Wednesday before the House Financial Services Committee.

Investors, however, lately have been having a hard time shaking those fears over rising inflation and higher borrowing costs with President Joe Biden's $1.9 trillion stimulus bill likely to pass and vaccine distribution across the country improving.

Tesla  (TSLA) - Get Tesla Inc. Report ended 6.2% higher on Wednesday following reports that Cathie Wood's Ark Investment funds bought more than $170 million of shares in the electric vehicle maker during Tuesday's selloff. 

Johnson & Johnson  (JNJ) - Get Johnson & Johnson Report traded up 1.3% after staff at the Food and Drug Administration said the company's COVID-19 vaccine was safe and effective. The move came ahead of a meeting Friday on emergency-use authorization for the vaccine.

Bitcoin rose Wednesday to $49,119 after tumbling to $45,000 in the previous session. The cryptocurrency was getting a boost from Ark Investment's Wood, who told Bloomberg she was “very positive on bitcoin, very happy to see a healthy correction here.”

Square  (SQ) - Get Block Inc. Class A Report said separately it purchased $170 million in bitcoin.