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Stocks end higher on Yellen; Dow and S&P at record heights; Cisco a drag

By: Kate Gibson | Markets Writer

Pisani: You're okay if you don't lower guidance

Thursday, 14 Nov 2013 | 4:00 PM ET

CNBC's Bob Pisani looks at the day's market action including Fed chair nominee Janet Yellen's testimony and poor guidance from Cisco.

U.S. stocks rose on Thursday, lifting the Dow industrials and S&P 500 to their loftiest levels, as investors embraced signals sent by Janet Yellen that the Federal Reserve would continue its monetary stimulus.
"Everyone is focused on this Yellen hearing, clearly she is going to continue the policies in place. It's always nice to hear it reaffirmed," Peter Sidoti of Sidoti & Co., said of testimony Thursday by Yellen, nominated to be the next chairman of the Fed.

	Name	Price		Change	%Change
		Dow Jones Industrial Average	15876.22		54.59	0.34%
S&P 500	S&P 500 Index	1790.62		8.62	0.48%
NASDAQ	Nasdaq Composite Index	3972.74		7.16	0.18%

A day after finishing at an all-time high, the Dow Jones Industrial Average did a repeat performance, advancing 54.59 points, or 0.4 percent, to 15,876.22, with Home Depot pacing gains that included 23 of its 30 components. Shares of Cisco Systems were slammed, with the Dow components off nearly 11 percent after it forecast a steep drop in revenue.
"Yellen's comments would lead the market to have less expectations of a December taper, which seemed to be building for a while, so that is offsetting some of the negative fundamentals," said Bill Stone, chief investment strategist at PNC Wealth Management in Philadelphia, referring to the negative outlook from the network-equipment maker.
The S&P 500 also notched another record finish, up 8.62 points, or 0.5 percent, to 1,790.62, with utilities the best performing and technology the sole sector declining among its 10 major industry groups.
One could argue that a correction is in order, given the market's record-breaking advance. "You could say we're overdue. But the opposite argument is it remains an extremely good environment for equities, with low inflation, high liquidity, low interest rates and an improving global economy to help earnings," said Stone.
The Nasdaq gained 9.57 points, or 0.3 percent, to 3,415.14.
For every stock falling, almost two gained on the New York Stock Exchange, where nearly 633 million shares traded. Composite volume topped 3.1 billion.

"I consider it imperative that we do what we can to promote a strong recovery," Yellen replied to a question during her hearing before the Senate Banking Committee. "It's important not to remove support, especially when the recovery is fragile and tools available to monetary policy, should the economy falter, are limited given that short-term interest rates are at zero," she said.
"The market seemed to be moving towards some probability of a December taper," said Stone of the recent rise is yields, with Stone noting the 10-year Treasury going from less than 2.5 percent in late October to 2.79 percent in recent days. "We're now back at 2.7 percent, so that's why I think you can say Yellen is part of the deal here," said Stone.
On the New York Mercantile Exchange, gold futures rose $17.90, or 1.4 percent, to $1,286.30 an ounce; oil futures fell 12 cents, or 0.1 percent, to $93.76 a barrel.
Wal-Mart Stores and Kohl's declined after both retailers trimmed their outlooks.
"Wal-Mart has struggled; their demographic has as well, so that may be part of it," said PNC's Stone.
Economic reports released Thursday had more Americans than estimated filing for jobless benefits, with applications dipping by 2,000 to 339,000 last week.
Separate data had worker productivity expanding less than expected in the third quarter and the trade deficit increasing more than forecast in September.
Also Thursday, President Barack Obama held a news conference on the Affordable Care Act, saying that individuals with insurance policies that are being canceled because they don't meet the Affordable Care Act's standards will be allowed to renew them.

—By CNBC's Kate Gibson
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