Dow Hits Five-Year High

Stocks rebounded Wednesday, bouncing back from Monday's steep declines fueled by uncertain results from the Italian parliamentary elections. While the vote returns remain muddled, investors instead were buoyed by Federal Reserve Chairman Ben Bernanke who said the central bank is unlikely to turn off the stimulus spigot anytime soon. Strong earnings results from retailers Home Depot (HD) and Macy's (M) -- along with positive data on consumer sentiment and the housing market -- also lifted moods. All 10 industry sectors in the S&P 500 finished higher, led by gains among energy and materials stocks as most commodities rose.

Bernanke On Easing
In semi-annual remarks to Congressional, Fed Chairman Ben Bernanke pushed back against criticism the central bank's asset-purchase program creates more risks than benefits for the U.S. economy and financial markets. He also urged lawmakers to replace the sequester budget cuts set to begin on Friday, warning the broad reductions could create a significant headwind for the economic recovery. Instead, he suggested Congress should implement a more gradual approach to fiscal restraint over the near term with more substantial reduction over the long run.

In defending the Fed's quantitative easing program, Bernanke told the Senate Banking Committee, we do not see the potential costs of the increased risk-taking in some financial markets as outweighing the benefits of promoting a stronger economic recovery and more rapid job creation. He did not provide any new clues to when the Fed would ease up or end its accomodative policies.

Stocks firmed through the afternoon following Bernanke's testimony, with traders appearing to shake off worries the Fed was much closer to ending QE3 than previously thought and which sparked two days of steep market losses last week.

The gains were far from uniform, however. Three stocks -- Home Depot (HD), Chevron (CVX) and IBM (IBM) -- were responsible for about half of the Dow Industrial's advance. HD shares rose about 5.5% today after reporting adjusted Q4 earnings of $0.67 per share, beating analyst forecasts by $0.03. Revenue rose 14% to $18.25 bln, also topping estimates. The home-improvement retailer guided FY13 earnings that trail the Street view by $0.10 although investor were mollified by HD raising its quarterly dividend by 34% to $0.39 per share. The company also authorized a new $17-bln stock buyback program.

Data Front
Homebuilders and other consumer stocks also posted gains after new data showed U.S. home prices rose more than expected in December, according to the S&P/Case-Shiller index. Consumer confidence as measured by the University of Michigan/Thomson Reuters also rebounded in February, jumping a higher-than-expected 11 points to 69.6, erasing January's eight-point slide and easily topping the 61.0 score that analysts on average had predicted.

Sales of new single-family homes jumped nearly 16% during January, coming in at a seasonally adjusted annual rate of 437,000, the government said. The results bested consensus estimates of 381,000. Also, home prices in 20 U.S. markets rose a combined 7.3% during the final three months of 2012 over the same quarter in 2011, according to the S&P/Case-Shiller Home Price Index. Nineteen of the 20 metropolitan statistical areas posted positive year-over-year growth, with only New York falling from its prior-year levels.

Crude oil for April delivery fell 48 cents to settle at $92.63 per barrel. March natural gas rose 1.3 cents down to $3.43 per 1 million BTU. April gold added $28.90 to finish at $1,615.50 per ounce while March silver climbed 27 cents to $29.26 per ounce. March copper rose 2 cents to $3.57 per pound.

Here's Where The Markets Stood At Day's End

• Dow Jones Industrial Average up 115.96 (+0.84%) to 13,900.13
• S&P 500 up 9.09 (+0.61%) to 1,496.94
• Nasdaq Composite Index up 13.40 (+0.43%) to 3,129.65

• Hang Seng Index down 1.32%
• Shanghai China Composite Index down 1.40%
• FTSE 100 Index down 1.35%

• (+) SCLA, Q4 earnings of $0.41 per share beat analyst expectations by $0.09. Revenue climbs 42.1% over year-ago levels to $118.8 mln, topping estimates by $10.1 mln. Guides Q1 revenue above Street.
• (+) MNOV, Receives fast-track designation from U.S. Food and Drug Administration for its MN-166 drug candidate, a prospective treatment for methampetamine addiction.
• (+) ACFC, Agrees to $12.7 mln takeover offer from the Bond Street Holdings, with shareholders receiving $5 a share in cash in a transaction expected to close by June 30.
• (+) NEWL, Inks deal to deliver 1.48 metric tons of steam coal to a third-party buyer. Contract is expected to generate about $148 mln in revenue over its term.
• (+) CWH, Corvex Management LP and Related Fund Management LLC move to block a proposed offering of equity and debt, instead calling for steps to increase shareholder value and threatening to field a dissident board slate. The two groups own a combined 9.8% stake of the real estate investment trust.

• (-) GMO, Two environmental groups file suit seeking to overturn federal approvals for the Mt. Hope molybdenum mining project in central Nevada. The company is not a defendant in the suit.
• (-) GSGI, Sells $90 mln of new shares as part of company's recapitalization.
• (-) HSII, Q4 adjusted net loss of $0.02 trails analyst estimates by $0.20. Revenue also misses.
• (-) VSI, Revenue rises year over year to $218.9 mln, missing the Street view by about $5 mln. Adjusted net income of $0.40 per share in line with forecasts.