Dow, S&P gain on Janet Yellen; Nasdaq ends down for 2nd day

May 08 2014, 03:58 IST
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Janet Yellen cites housing, geopolitical tensions as economic risks (AP) Janet Yellen cites housing, geopolitical tensions as economic risks (AP)
SummaryDow up 0.7 pct; S&P 500 up 0.6 pct; Nasdaq off 0.3 pct

US stocks mostly rose on Wednesday after comments from Federal Reserve Chair Janet Yellen signaled continued support for the economy, but the Nasdaq fell for a second session as momentum names sold off.

Financials and utilities were the day's biggest gainers, with the S&P financial sector index up 1.3 percent and the utilities sector index up 1.6 percent.

On the Nasdaq, Yahoo! Inc fell 6.6 percent to $34.07 after Alibaba Group filed for an initial public offering that valued the Chinese e-commerce company well below analysts' consensus estimate.

Analysts at BGC Partners and Atlantic Equities told Reuters that Alibaba's valuation disappointed some Yahoo investors. Yahoo holds a 22.6 percent stake in Alibaba, of which it must sell more than a third through the IPO.

"The Alibaba IPO is drawing money out of Internet stocks because investors have to raise capital for the Alibaba IPO. That's why we see pressure on names like Google, Facebook and Amazon today," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.

Google shares fell 1 percent to $509.96 while Facebook shares slid 2 percent at $57.39. Inc declined 1.6 percent to $292.71.

Groupon Inc sank 20.7 percent to end at $5.33 as its sales and profit projections for the current quarter trailed some estimates.

Twitter Inc lost 3.7 percent to close at $30.66 after leading a selloff in Internet shares on Tuesday with an 18 percent tumble.

The Dow Jones industrial average rose 117.52 points or 0.72 percent, to close at 16,518.54. The S&P 500 gained 10.49 points or 0.56 percent, to end at 1,878.21. The Nasdaq Composite dropped 13.085 points or 0.32 percent, to finish at 4,067.673.

After declining in the morning session, the Dow and the S&P 500 moved into positive territory after Yellen said the US economy was still in need of lots of support, given the "considerable slack" in the labor market in remarks to the congressional Joint Economic Committee.

Yellen's comments enabled investors to shift attention to what may be an easing of the tensions in Ukraine, as Russian President Vladimir Putin called on pro-Moscow separatists in Ukraine to postpone a vote on secession just five days before it was to be held.

"Janet Yellen didn't say anything new in her testimony. She continues to talk about how they are data dependent, how they can change on a dime, but she didn't say rates are going up any time soon, which is exactly

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