MARKET SNAPSHOT: Stock Market Gains After Yellen Rate Comments

By Sara Sjolin and Anora Mahmudova, MarketWatch Features Dow Jones Newswires

Oil companies rise as crude jumps nearly 2%

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U.S. stocks advanced on Wednesday, after the release of prepared congressional testimony by Federal Reserve Chairwoman Janet Yellen, who said that interest rate increases will be gradual and would not need to rise all that much further.

Some analysts said that market participants viewed the remarks as somewhat dovish as they prepared to watch her appearance before lawmakers as part of her semiannual testimony before Congress.

The S&P 500 advanced by 16 points, or 0.7%, to 2,441 with nearly all of the 11 main sector trading higher. Utilities and energy shares were leading the gains, up about 1%.

The Dow Jones Industrial Average added 131 points, or 0.6%, to 21,540, trading above its previous closing high set last month. Caterpillar Inc,(CAT) 3M Company(MMM) and Intel Corp.(INTC) were the best performers among blue-chip companies, up more than 1% in early trade.

Meanwhile, the Nasdaq Composite Index rose 53 points, or 0.9%, to 6,246.

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"It was all about whether we will have two more rate hikes this year and it seems like the Fed instead will be using the balance sheet rather than Fed funds rates to normalize monetary policy," said Michael Antonelli, equity sales trader at Robert W. Baird & Co. "This is what a dovish rate hike cycle looks like and the stock market is liking it," he said.

The yield on the 10-year Treasury note fell 4 basis points to 2.32% as bond prices rose, while the dollar weakened against major rivals, sending the ICE Dollar own 0.2% at 95.53.

Yellen, who will appear before the House Financial Services panel at 10 a.m. Eastern, said in prepared remarks that "the evolution of the economy will warrant gradual increases in the federal-funds rate over time to achieve and maintain maximum employment and stable prices."

See:Live blog and video of Yellen's testimony before House panel (http://blogs.marketwatch.com/capitolreport/2017/07/12/live-blog-and-video-of-yellens-testimony-before-house-panel/)

Political tensions drove the dollar lower on Tuesday, and the greenback continued to fall against most major currencies on Wednesday. The dollar bought Yen113.13 Japanese yen , down from Yen113.94 in late Tuesday trade.

Earlier Tuesday, stocks logged modest losses after Donald Trump Jr. released a series of email exchanges about a June 2016 meeting to discuss potential incriminating information against Hillary Clinton as part of an alleged Russian push to support his father's presidency.

Also read: Trump impeachment likelier than ever after Junior's emails, bookie says (http://www.marketwatch.com/story/trump-impeachment-likelier-than-ever-after-juniors-emails-bookie-says-2017-07-12)

Yellen testimony: Investors will pay close heed to Yellen's back-and-forth with lawmakers when she appears on Capitol Hill.

Check out:Republicans to press Yellen on plan to reduce Fed's outsize role in economy (http://www.marketwatch.com/story/republicans-to-press-yellen-on-fed-plans-to-reduce-its-outsized-role-on-us-economy-2017-07-11)

See:Is Janet Yellen still calling the tune in financial markets? (http://www.marketwatch.com/story/is-janet-yellen-still-calling-the-tune-in-financial-markets-2017-07-10)

In other Fed-related news on Wednesday, the Beige Book comes out at 2 p.m., followed by Kansas City Fed President Esther George giving a speech in Denver at 2:15 p.m. Eastern on the economic outlook and the Fed's balance sheet.

Stock movers: Shares in NRG Energy Inc.(NRG) soared 18% after the company launched transformation plan to cut costs, slash debt and divest assets.

Snap Inc.(SNAP) shares rose 1%, trying to recover from 9% fall on Tuesday (http://www.marketwatch.com/story/snap-downgraded-to-equal-weight-by-one-of-its-lead-underwriters-2017-07-11), when it fell further below its initial-public-offering price.

Energy companies advanced in premarket action, tracking a nearly 2% jump in oil prices (http://www.marketwatch.com/story/oil-extends-gains-after-upbeat-us-production-data-2017-07-12). Shares of Chesapeake Energy Corp.(CHK) rose 2.5%, Exxon Mobil Corp.(XOM) added 0.7% and Chevron Corp.(CVX) gained 1%.

Shares of Fastenal Co.(FAST) rose 3.7% after a well-received earnings report.

Other markets: Asian stocks closed mixed (http://www.marketwatch.com/story/asian-market-gains-take-a-timeout-as-currencies-rise-2017-07-11), while Europe staged solid gains across the board (http://www.marketwatch.com/story/european-stocks-rise-lifted-by-oil-firms-and-burberry-2017-07-12).

Gold rose 0.2% to $1,217 an ounce and all other key metals were also on the rise.

(END) Dow Jones Newswires

July 12, 2017 09:51 ET (13:51 GMT)