By Investors Hub
The major U.S. index futures are pointing to a mixed opening on Wednesday, as the Dow futures are up by 69 points but the Nasdaq futures are down by 4.75 points.
Traders may be reluctant to make significant moves ahead of remarks by outgoing Federal Reserve Chair Janet Yellen.
Yellen is scheduled to testify on the economic outlook before the Congressional Joint Economic Committee beginning at about 10 am ET.
In prepared remarks released ahead of her appearance, Yellen said economic growth appears to have stepped up from its subdued pace early in the year.
Yellen noted inflation has continued to run below the Fed’s 2 percent target but said recent lower readings on inflation likely reflect transitory factors.
The Fed Chair also reiterated that she expects gradual increases in interest rates will be appropriate to sustain a healthy labor market and stabilize inflation around the central bank’s objective.
Stocks saw some volatility in afternoon trading on Tuesday but managed to end the session firmly in positive territory. With the strong upward move on the day, the major averages climbed to new record closing highs.
The major averages ended the session just off their best levels of the day. The Dow surged up 255.93 points or 1.1 percent to 23,836.71, the Nasdaq climbed 33.84 points or 0.5 percent to 6,912.36 and the S&P 500 jumped 25.62 points or 1 percent to 2,627.04.
The notably higher close on Wall Street was partly due to news the Republican tax reform bill took another key step forward, as the legislation was approved by the Senate Budget Committee.
Members of the Senate Budget Committee voted 12 to 11 to advance the bill, with the vote coming down strictly along party lines.
The vote to send the bill to the Senate floor came after Republican Senators Bob Corker, R-Tenn., and Ron Johnson, R-Wis., dropped their objections to the bill.
The full Senate could vote on the bill as early as Thursday, although the legislation still includes significant differences from the House version.
Traders also reacted positively to remarks by Federal Reserve Chair nominee Jerome Powell, who testified before the Senate Banking Committee.
Powell told the committee he favors “tailoring” banking regulations so the largest and most complex institutions face the most stringent regulations while the burden on smaller banks is reduced.
The Fed Chair nominee also said the case for a December interest rate hike is “coming together” and said the central bank will continue reducing its $4.5 trillion balance sheet in a process that will take three or four years.
Powell repeatedly refused to comment on the potential economic impact of the Republican tax reform legislation working its way through Congress.
On the economic front, the Conference Board released a report showing an unexpected improvement in consumer confidence in the month of November.
The Conference Board said its consumer confidence index climbed to 129.5 in November from an upwardly revised 126.2 in October. Economists had expected the index to drop to 124.5.
With the unexpected increase, the consumer confidence index rose to its highest level since reaching 132.6 in November of 2000.
In mid-afternoon trading, some selling pressure was generated by reports that North Korea fired a ballistic missile, although traders quickly shrugged off the news.
Banking stocks showed a substantial move to the upside over the course of the session, driving the Dow Jones Banks Index up by 3.3 percent. With the jump, the index reached its best closing level in three weeks.
The rally by banking stocks partly reflected a positive reaction to Powell’s comments regarding financial regulations, which he called “tough enough.”
Significant strength also emerged among airline stocks, as reflected by the 2 percent gain posted by the NYSE Arca Airline Index. The index reached its best closing level in over a month.
Trucking, railroad, brokerage, and housing stocks also saw considerable strength on the day, moving higher along with most of the other major sectors.
