Apple (AAPL) stock update: Investors keeping tabs on Apple's annual shareholders meeting
Ben Rooney, CNNMoney
8:35 AM, Feb 28, 2013
NEW YORK -- A rally on Wall Street gained momentum late Wednesday as investors welcomed more upbeat housing data and a second day of dovish testimony from the chairman of the Federal Reserve.
The Dow Jones industrial average rallied 175 points, or 1.2%, to end at its highest level since October 2007. The S&P 500 jumped 1.3% and the Nasdaq gained 1%.
Investors are keeping tabs on Apple's annual shareholders meeting.
Apple shareholders did not vote on a controversial proposal that would have limited the company's ability to issue preferred stock. Hedge fund manager David Einhorn, who had launched an activist campaign to unlock some of Apple's $137 billion cash hoard. Apple will put that to a vote at a later date.
Traders said the rally was a continuation of Tuesday's advance, which came after Fed chairman Ben Bernanke signaled to lawmakers that the central bank's easy money policies would remain in force. Bernanke reiterated his argument Wednesday that the Fed's bond-buying program, known as QE, has helped the economy.
"There's nothing specific to cite," said Dan Greenhaus, market strategist at BTIG in New York. "But if you had to pin it to something, it would be Bernanke saying QE will continue in an environment of improving economic data."
Stocks have been pulling back lately, after a strong start to the year. All three indexes are still up between 6% to 7% so far this year.
Investors also cheered further signs of strength in the housing market.
A realtors group said Wednesday that pending home sales rose in January to the highest level since April 2010. The pending home sales data came one day after reports on home prices and sales came in better than expected.
Homebuilder stocks rallied Wednesday, with shares of Hovnanian jumping 5%, leading rivals Toll Brothers, DR Horton and Lennar.
The housing data overshadowed a mixed report on new orders for long-lasting goods.
The U.S. Census Bureau said durable goods orders dropped $11.8 billion, or 5.2%, in January. This was a steeper decline that the decrease of 3.5% projected by economists. However, excluding transportation, new orders would have increased 1.9%.
Overall, the durable goods data were "far better than the headline decline suggests," said Paul Ashworth, chief U.S. economist at Capital Economics.
Investors were also encouraged by a successful auction of €6.5 billion in Italian government bonds. Wednesday's bond That helped push European markets higher. Italy has been a concern for investors since elections over the weekend raised concerns about the government's commitment to economic reforms.
Shares of Groupon plunged more than 20% after the online coupon site widely missed forecasts and said sales in the current quarter would fall short of estimates.
Shares of Priceline rose after the online travel site beat profit forecasts.
First Solar shares sank after the renewable energy firm missed sales forecasts.
Shares of Dollar Tree jumped after the discount retailer said it earned $1.01 per share on sales of $2.25 billion in the fourth quarter.
Gun maker Sturm Ruger will report results after the closing bell, along with J.C. Penney, among others.
Asian markets ended mixed. Japan's Nikkei lost 1.3%, while the Shanghai Composite added 0.9% and Hong Kong's Hang Seng increased 0.2%.
Oil prices edged higher while gold prices slipped.
The dollar fell versus the euro and the pound, but gained against the yen.
The yield on the 10-year Treasury note rose to 1.9% from 1.88%.