Stock Market News for February 15, 2017

Benchmarks sealed their fourth consecutive record highs on Tuesday after Fed Chair Janet Yellen indicated that a rate hike could occur sooner than expected. Following Yellen's statements, banks rallied strongly following optimism about a higher interest rate regime. Apple also notched up yet another record high. Indicators of business optimism and inflation also registered good readings during the day, leading to further optimism among investors at large.

For a look at the issues currently facing the markets, make sure to read today's Ahead of Wall Street article.

The Dow Jones Industrial Average (DJI) increased 0.5%, to close at 20,504.41. The S&P 500 rose 0.4% to close at 2,337.58. The tech-laden Nasdaq Composite Index closed at 5,782.57, gaining 0.3%. The fear-gauge CBOE Volatility Index (VIX) decreased 1.2% to settle at 10.94. A total of around 6.7 billion shares were traded Friday, matching the last 20-session average. Advancers outpaced declining stocks on the NYSE. For 50% stocks that advanced, 46% declined.

What Boosted The Benchmarks?

Fed Chair Janet Yellen's first day testimony before Congress solidified the views that the Fed is more hawkish now. Yellen left the possibility of a rate hike open as early as the central bank's next policy meeting in March on Feb 14. Citing an improving economy and solid labor market, she noted that waiting too long to hike rates would be unwise since it might hamper the broader financial markets. She reiterated some of the language from the Fed's last policy meeting that adopted a more hawkish outlook, while indicating that she is concerned about the possibility of holding off rate hike for too long.

Yellen expects gradual rate increases to occur amid a modestly expanding economy and inflation that should touch the Fed's desired target rate of 2% in the near term. She said that "at our upcoming meetings, the Fed will evaluate whether employment and inflation are continuing to evolve in line with…expectations, in which case a further adjustment of the federal funds rate would likely be appropriate".

As Yellen signaled that the central bank could gradually raise interest rates sooner rather than later, financial stocks lead gains for the day, with the Financial Select Sector SPDR (XLF) increasing 1.2% on Feb 14. The financial sector has rallied more than 20% since the November election, and 4.2% this month alone.

Bank stocks jumped after Yellen's hawkish comments on interest rates. Higher longer-term interest rates can boost bank profits, as they increase the spread between what banks earn by funding longer-term assets, such as loans, with shorter-term liabilities. Bank of America ( BAC ) rose 2.8% on Feb 14 to its best levels since Nov 2008, while Wells Fargo ( WFC ), Citigroup ( C ) and JPMorgan Chase ( JPM ) went up 1.6%, 1.5% and 1.6%, respectively, hitting all-time highs.

Meanwhile, shares of Apple Inc. ( AAPL ) increased to another intraday record level of $135.09, before closing with a gain of 1.3% at its highest ever closing price of $135.02. The company possesses a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

In economic news, the U.S. Bureau of Labor Statistics reported that Producer Price Index (PPI) rose 0.6% last month, beating the consensus estimate of a 0.3% increase. This is the largest monthly increase registered since 2012. Also, core-PPI increased 0.4% in January, higher than consensus estimate of 0.2% rise.

Stocks That Made Headlines

Denbury Releases 2017 Capital Budget & Production Estimates

Denbury Resources Inc. ( DNR ) recently released its capital budget and estimated production for 2017. ( Read More )

Hewlett Packard Introduces Data-centric IoT Security

Hewlett Packard Enterprise Company ( HPE ) surprised the RSA Conference 2017 crowd yesterday by introducing a new service. ( Read More )

Chesapeake Energy Releases 2017 Capital Budget Estimates

Chesapeake Energy Corporation ( CHK ) recently issued the estimates for its 2017 capital budget. ( Read More )

Health Insurers' Courtship Ends on Valentine's Day

More than one and a half years of courtship between Anthem Inc. ( ANTM ) and Cigna Corp. ( CI ) as well as Aetna Inc. ( AET ) and Humana Inc. ( HUM ) ended yesterday. ( Read More )

Zacks' Top 10 Stocks for 2017

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Bank of America Corporation (BAC): Free Stock Analysis Report

Wells Fargo & Company (WFC): Free Stock Analysis Report

Citigroup Inc. (C): Free Stock Analysis Report

J P Morgan Chase & Co (JPM): Free Stock Analysis Report

Apple Inc. (AAPL): Free Stock Analysis Report

Hewlett Packard Enterprise Company (HPE): Free Stock Analysis Report

Denbury Resources Inc. (DNR): Free Stock Analysis Report

Anthem, Inc. (ANTM): Free Stock Analysis Report

Chesapeake Energy Corporation (CHK): Free Stock Analysis Report

Cigna Corporation (CI): Free Stock Analysis Report

Aetna Inc. (AET): Free Stock Analysis Report

Humana Inc. (HUM): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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