* Fed chief reaffirms support for easy monetary policy
* U.S. business spending plans gauge hits one-year high
* Priceline.com gains after results, Target lower
* Indexes up: Dow 1 pct; S&P 1.1 pct; Nasdaq 1.1 pct
By Ryan Vlastelica
NEW YORK, Feb 27 U.S. stocks rose 1 percent on
Wednesday, erasing much of the week's losses as Federal Reserve
Chairman Ben Bernanke remained steadfast in his support of the
Fed's stimulus policy and data pointed to economic improvement.
In his second day before a congressional committee, Bernanke
repeated testimony in which he defended the Fed's policy of
buying bonds to keep interest rates low in order to promote
growth and bring down the unemployment rate.
The remarks helped the market rebound from its worst decline
since November and put the S&P 500 back above 1,500, a closely
watched level that has been technical support until recently.
The comments also seemed to remove a headwind from markets
that last week contributed to equities breaking a seven-week
streak of gains on concerns the quantitative easing program may
end earlier than had been anticipated.
"The Fed continues to encourage risk-taking in markets,
which is a powerful tool that makes the danger not being long
stocks, not in being too long," said Tom Mangan, a money manager
at James Investment Research Inc in Xenia, Ohio.
Adding to the positive tone was economic data which showed a
gauge of planned U.S. business spending in January recorded its
largest increase in just over a year, while contracts to buy new
homes neared a three-year high last month.
The S&P 500 had climbed 6 percent for the year and came
within reach of all-time highs before pulling back on concerns
about Fed policy, as well as this week's inconclusive elections
in Italy, which rekindled fears of a new euro zone debt crisis.
The Dow Jones industrial average was up 140.76
points, or 1.01 percent, at 14,040.89. The Standard & Poor's 500
Index was up 16.15 points, or 1.08 percent, at 1,513.09.
The Nasdaq Composite Index was up 33.56 points, or 1.07
percent, at 3,163.21.
The S&P is down 0.2 percent on the week, recovering from a
plunge on Monday that was the index's biggest daily drop since
November. That drop came on concerns over Italy's election, as
well as over sequestration - U.S. government budget cuts that
will take effect starting on Friday if lawmakers fail to reach
an agreement on spending and taxes.
"While the rally remains intact and there are reasons to be
long-term bullish here, there are also reasons to not be
surprised if we get a correction," said Mangan, who helps
oversee $3.7 billion. Issues like the sequester and Europe
"could mean that this ends up being a more difficult year for
In earnings news, Priceline.com gained 3.4 percent
to $702 after reporting adjusted earnings that beat
expectations. TJX Cos Inc jumped 1.7 percent to $44.40
after the retail chain operator posted higher fourth-quarter
The S&P retail index climbed 1.6 percent.
Target Corp appeared poised for a solid showing in
the first quarter and forecast a higher profit for the full year
after a weak performance in the key holiday season. The stock
dipped 1.1 percent to $63.32.
With 93 percent of the S&P 500 companies having reported
results so far, 69.5 percent beat profit expectations, compared
with a 62 percent average since 1994 and 65 percent over the
past four quarters, according to Thomson Reuters data.
Fourth-quarter earnings for S&P 500 companies are estimated
to have risen 6.2 percent, according to the data, above a 1.9
percent forecast at the start of the earnings season.