* Yahoo at highest price since 2008
* Housing starts below expectations
* Indexes up: Dow 0.2 pct, S&P 0.2 pct, Nasdaq 0.2 pct
By Alison Griswold
NEW YORK, July 17 U.S. stocks rose modestly on
Wednesday after Federal Reserve Chairman Ben Bernanke said the
central bank's plan to start winding down its monetary stimulus
later this year depended on the economy's performance.
In his twice yearly report to Congress on monetary policy ,
Bernanke stayed near the timeline he first laid out last month,
that the Fed's bond-buying program would cease by mid-2014,
though he stressed the plan was not set in stone.
Nine of the 10 S&P 500 industry sectors moved higher, led by
gains in commodities and health shares. St. Jude Medical
was one of the the S&P 500's best performers after its profit
topped expectations, adding 6.9 percent to $51.82.
Shares were off their highs but still positive after falling
on Tuesday and snapping an eight-day string of gains for the S&P
"Right off when his testimony came out we popped, and we
seem to be drifting back up to the highs again," said Dennis
Dick, proprietary trader at Bright Trading LLC in Las Vegas.
"Whenever there's trouble it seems like the Fed will come in
and bail this market out. It's hard to short this market."
Financial markets have been sensitive to speculation over
when the Fed will begin to scale back its $85 billion a month in
bond purchases. Comments by Bernanke and minutes from a Fed
meeting in late May triggered a nearly 6 percent drop in the S&P
500 in the month that followed.
But statements from Bernanke and other Fed officials in
recent weeks have placated investors and erased those declines,
with the S&P rallying to a record high on Monday.
The Dow Jones Industrial Average was up 24.08 points,
or 0.16 percent, at 15,475.93. The Standard & Poor's 500 Index
was up 6.26 points, or 0.37 percent, at 1,682.52. The
Nasdaq Composite Index was up 11.70 points, or 0.33
percent, at 3,610.20.
Yahoo Inc's lackluster results failed to put off
Wall Street analysts, who focused on its stake in the
fast-growing Chinese e-commerce firm Alibaba and
product development efforts. The company's shares jumped 6.5
percent to trade at $28.63, their highest price since May 2008.
Financial stocks advanced, led by gains in Bank of America
Corp, up 1.8 percent to $14.18, and BNY Mellon Corp
, which rose 3.4 percent to $31.39, after they reported
The S&P financial sector gained 0.5 percent.
Economic data showed housing starts dropped 9.9 percent to a
seasonally adjusted annual rate of 836,000 units, the lowest
level since August last year and below the 959,000 forecast.
Other data on Wednesday will include the Fed's Beige Book of
regional economic conditions due at 2 p.m. (1800 GMT).
American Express fell 4.4 percent to $74.75 as the
biggest drag on both the Dow and S&P 500 after the European
Commission said it would propose a limit of 0.2 percent and 0.3
percent on the fees that banks charge to process debit card and
credit card transactions.
Analysts expect S&P 500 companies' second-quarter earnings
to have grown 3.3 percent from a year earlier, with revenue up
1.2 percent, data from Thomson Reuters showed.
Other S&P 500 companies scheduled to report earnings on
Wednesday include eBay Inc, IBM and Intel Corp