U.S. Federal Reserve Chairman Ben Bernanke’s comments before the House Financial Services Committee on Wednesday had a fairly modest but generally positive effect on markets. All three major U.S. indexes ended the day higher, with the Dow Jones Industrial Average climbing 18.6 points, or 0.12 percent, to 15,470.42.
On Thursday, Bernanke sat down for a second testimony before the Senate Banking, Housing, and Urban Affairs Committee and articulated a flexible and dynamic wind-down of stimulus purchases and eventual policy tightening. The market, usually skittish when Bernanke addresses the public, seemed reassured by the chairman’s vision of an improving U.S. economy.
In morning trading, the Dow hit a new intraday record of 15,589.4, fueled by Bernanke’s comments but driven by the performance of a few key players. Leading the pack in the middle of the day was UnitedHealth Group (NYSE:UNH), which was trading up nearly 6 percent and set a new 52-week high after reporting strong earnings. Revenue climbed 11.5 percent on the year to $30.41 billion, just missing the average analyst estimate of $30.5 billion. However, adjusted earnings climbed 10.2 percent on the year to $1.40 per share, beating the average estimate of $1.25 per share.
Boeing (NYSE:BA) climbed as much as 2.6 percent in midday trading at $107.98, flirting with its own 52-week high of $108.15. The company and its stock have performed remarkably well in the face of another issue with its 787 Dreamliner. One of the aircrafts owned by Ethiopian Airlines caught fire for an unidentified reason while sitting empty at London’s Heathrow Airport last week.
As of right now, sources report that Boeing’s 787s aren’t in immediate danger of a grounding, and high-profile operators such as ANA Holdings Inc. and United Airlines, along with Thomson Airways, LOT Polish Airlines, and Air India Ltd. continue to fly their Dreamliners. United, the world’s largest carrier and a unit of United Continental Holdings (NYSE:UAL), owns six of the 787 aircrafts and is an example of an airline company that has resolutely stood its ground on Boeing safety despite the company’s many setbacks.
IBM (NYSE:IBM) may be the company to thank the most for moving the Dow on Thursday. As a price-weighted index, the higher the share price of a company, the more influence it has over the index. IBM stock climbed as much as 2.2 percent after reporting its second-quarter financial results.
Revenue decreased 3.3 percent on the year to $24.92 billion, missing the average analyst estimate of $25.37 billion. However, adjusted earnings increased 11.4 percent on the year to $3.91 per share, beating the average analyst estimate of $3.77 per share.
Bank of America (NYSE:BAC) stock climbed as much as 3.7 percent in early afternoon trading and set a fresh 52-week high of $14.85 per share. Earlier in the week, the firm reported an incredible 68.4 percent year-over-year increase in adjusted earnings to 32 cents per share, handily beating the average estimate of 25 cents per share. The firm also reported a net revenue decrease of 13.13 percent on the year to $22.95 billion but still beat average analyst estimates of $22.79 billion.
Exxon Mobil (NYSE:XOM) stock was up about 1.2 percent in midday trading. As the largest producer of natural gas in the United States, the company has been grappling with dramatic changes in the domestic energy landscape. The production of natural gas from horizontal drilling and hydraulic fracturing practices have pushed supplies to record highs — the International Energy Agency expects natural gas production to grow 2.4 percent each year through 2018 — and Exxon has been fighting to expedite legislation in favor of exporting the fuel.