Stocks extended their rally Tuesday afternoon after Federal Reserve Chair Janet Yellen stressed caution in raising interest rates.
The S&P 500 added 0.83%, the Dow Jones Industrial Average gained 0.55%, and the Nasdaq was up 1.7%. Stocks started the day modestly lower.
The central bank should move cautiously in raising interest rates, Yellen said in remarks to the Economic Club of New York on Tuesday. Yellen also said the fallout from market turmoil earlier this year on the economy looked to be minimal.
"I consider it appropriate for the committee to proceed cautiously in adjusting policy," said Yellen. "This caution is especially warranted because, with the federal funds rate so low, the FOMC's ability to use conventional monetary policy to respond to economic disturbances is asymmetric. If economic conditions were to strengthen considerably more than currently expected, the FOMC could readily raise its target range for the federal funds rate to stabilize the economy."
At its recent March meeting, the Fed downgraded its forecasts to two rate hikes this year from four. However, recent comments from Fed members such as St. Louis Fed President James Bullard suggested an April rate hike isn't off the table.
The tech sector was the best performer on markets Tuesday, leading the Nasdaq in its rally. Tech giants such as Alphabet (GOOGL - Get Report) , Microsoft (MSFT - Get Report) , Facebook (FB - Get Report) and Alibaba (BABA - Get Report) were higher, while the Technology Select Sector SPDR ETF (XLK - Get Report) added 1.2%.
Alphabet and Facebook are holdings in Jim Cramer's Action Alerts PLUS portfolio.
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Consumers felt more confident in March as stock markets rebounded from a devastating start to the year, while talk of a possible recession became less frequent. Confidence rose to 96.2 in March, up from a revised 94 in February, the Conference Board said. Economists expected the index to rise to 94.2.
Home prices jumped in January as tight inventories continue to push values higher. House prices rose 5.7% at the beginning of the year, according to the S&P/Case-Shiller 20-city index, with double-digit percentage increases seen in Denver, San Francisco and Seattle.
The hijacking of a domestic Egyptian flight and subsequent hostage situation came to a close Tuesday with the hijacker surrendering, according to reports. An Egyptian man hijacked an EgyptAir flight overnight, forcing the plane to land in Cyprus. Officials have assured that the incident isn't related to terrorism but instead to the hijacker's ex-wife. The situation added fears over the vulnerability of airline security just a week after a terrorist attack in Brussels.
Crude oil slumped again as a hangover from last week's disappointing domestic data on the oil industry continued through to the new week. Oil has seen a renewed push lower on signs a domestic supply glut is worsening as inventories build by millions of barrels each week. The American Petroleum Institute will release data on crude inventories this evening. West Texas Intermediate crude fell 2.7% to $38.33 a barrel.
"With the API crude stock numbers due up this evening, and the [Energy Information Administration] petroleum report tomorrow, the potential for a repeat of last week's scenario is adding pressure to oil prices," said Robbie Fraser, commodity analyst, at Schneider Electric. "Current average expectations call for a build of 2-3 million barrels for U.S. crude stocks, which could be largely countered by a corresponding draw to gasoline stocks amid elevated transportation demand."
Chipotle (CMG - Get Report) fell 2% after Wedbush downgraded the stock to underperform from neutral with a $400 price target. Analysts said unit economics may remain poor even if sales rebound. The firm said a sales recovery by 2018 is more likely than forecasts in the shorter term.
LinkedIn (LNKD) was under pressure after Barclays downgraded its stock to equal weight from overweight. Analysts said it expects a "decent period of consolidation" for the professional social network as investors assess its new growth trajectory.
The standoff between the FBI and Apple (AAPL - Get Report) abruptly ended on Monday after prosecutors asked a federal judge to vacate a disputed order for Apple to break into a phone used by the San Bernardino terrorists. The FBI said it had used an alternative method to unlock the phone, though did not divulge its workaround. The case had triggered debate over whether Apple should acquiesce and potentially weaken all customers' security.
Apple is a holding in Jim Cramer's Action Alerts PLUS portfolio.
Yahoo! (YHOO) reportedly has given potential buyers an April 11 deadline to submit bids for its core Internet business and Asian assets, such as its stakes in Alibaba (BABA - Get Report) and Yahoo! Japan. The company is looking to narrow the field to around 40 bidders.
SunEdison (SUNE) tanked nearly 30% on reports the Securities and Exchange Commission is investigating whether the company misled investors over its liquidity position. Regulators are reportedly looking into whether the claim it had $1.4 billion in cash last year during a share price collapse was accurate.
Lennar (LEN - Get Report) climbed more than 2% after topping analysts' estimates on its top- and bottom-lines during its fiscal first quarter. The homebuilder earned an adjusted 63 cents a share, 11 cents above estimates, while revenue of nearly $2 billion surged 21% from a year earlier.