Ben Bernanke appears to have put investor fears to rest -- for the time being, anyway. Stocks surged Thursday following the Federal Reserve chairman's comments late Wednesday that the economy still needs "a highly accommodative monetary policy for the foreseeable future," with investors pushing the Standard & Poor's 500 index to an all-time closing high.
Investors took Bernanke's speech as an assurance that the Fed isn't about to begin pulling back from its bond-buying program, which has helped to drive stocks much higher this year.
The Dow Jones industrial average (^DJI) jumped 169 points, or 1.1 percent to close at 15,461, while the S&P 500 (^GPSC) advanced 22 points, or 1.4 percent, to 1,675, besting its previous all-time closing record of 1,669 on May 21. The Nasdaq (^IXIC) climbed 58, or 1.6 percent, to 3,578.
The Fed is currently buying $85 billion a month in bonds to keep interest rates low and to encourage spending and hiring. After Bernanke's remarks, stocks that are helped by low interest rates, such as home builders, perked up.
Homebuilders D.R. Horton (DHI) rose $1.93, or 9.2 percent, to $22.98, Lennar (LEN) climbed $2.88, or 8.3 percent, to $37.44, and PulteGroup (PHM) advanced $1.37, or 7.2 percent, to $20.39.
Fears of a Fed pullback and a recovering housing market have prompted mortgage rates to climb in recent weeks -- and this week was no exception. Freddie Mac said the average rate on a 30-year mortgage rose to 4.51 percent from 4.29 percent the previous week. The average on the 15-year fixed mortgage increased to 3.53 percent from 3.39 percent last week. That's the highest since August 2011.
Mortgage rates may be rising, but the nation's deficit is falling. The federal government reported a rare surplus of $116.5 billion in June, the largest for a single month in five years. The gain kept the nation on track for its lowest annual deficit in half a decade. Treasury said the surplus was due in part to $66.3 billion in dividend payments by Fannie Mae and Freddie Mac for the taxpayer support they received in 2008 at the height of the financial crisis.
Stocks in the news Thursday:
Shares of PriceSmart (PSMT) fell after the warehouse club operator reported its fiscal third quarter net income below Wall Street expectations. Shares fell $1.16, or 1.3 percent, to $90.47, after earlier falling as low as $85.36.
Bridgepoint Education (BPI) rose $3.31, or 26 percent, to $15.92, after the for-profit education company said its Ashford University had won accreditation. Bridgepoint, which also operates the University of the Rockies, struggled with accreditation problems for much of 2012.
Rockwell Medical Technologies (RMTI) jumped 59 cents, or 15.7 percent, to $4.35, after the drug developer said an experimental treatment for kidney patients took a step toward winning approval.
Celgene (CELG) rose $9.84, or 7.9 percent, $134.92 after the Swiss drugmaker said its cancer drug, Revlimid, met its goals in a late-stage study.
The Federal Trade Commission has signed off on Hertz's $2.3 billion acquisition of rival rental-car company Dollar Thrifty Automotive Group. As part of that deal, Hertz sold off its former Advantage car rental business, select airport operations and some other assets. Shares of Hertz Global Holdings (HTZ) rose 3.2 percent to $27.07.
What to watch Friday:
JPMorgan Chase (JPM) and Wells Fargo (WFC) report quarterly earnings before U.S. stock markets open.
The Labor Department releases data on producer prices for June at 8:30 a.m. Eastern Time.
At 9:55 a.m., the University of Michigan issues its first reading of consumer sentiment for July.
-Compiled from staff and wire reports.
The Monster in the Closet: Economic Horrors and Scary Movies
Closing Bell: Bernanke Allays Fears, S&P 500 Has Record Close
If you thought this classic horror movie was about a haunted house, see if this scenario sounds familiar: An idealistic young couple buys a home that sounds too good to be true. Once they're mortgaged to the hilt, problems start to crop up. They can't leave, they can't stay, and an unseen evil force starts to tear their family apart.
Filmmakers have used zombies to symbolize everything from faceless corporations to the inhumanity of the military industrial complex. In this early offering (and, to a lesser extent, in its remake), it isn't particularly hard to figure out the greater symbolism of a bunch of mindless, shambling zombies swarming into a shopping mall.
Speaking of mindless shambling, "Shaun of the Dead" used the same conceit to symbolize office work.
Everybody remembers Janet Leigh's death scene in the classic slasher flick. What they forget, though, is why she ended up in the Bates Motel in the first place: She was on the run after stealing a small fortune from her employer. As for the motel itself, it was facing hard times because the recently-unveiled highway drove away business.
For a funnier take on a similar story, you might try taking a peek at "Auntie Lee's Meat Pies", which manages to brilliantly combine cannibalism, serial murder and Pat Morita.
Forget ghosts and ghouls: Few things are scarier than asking the bank for a loan. But in this Sam Raimi-directed flick, the tables are turned as a young loan officer turns a deaf ear to a seemingly feeble gypsy woman trying to borrow some money. Needless to say, all hell breaks loose.
On the surface, this 1981 classic is the tale of super-evolved wolves preying on New Yorkers. Scratch a little deeper, though, and another story emerges: The tale of wealthy Manhattanites preying on poor people in the Bronx, then being themselves preyed upon by wolves. In other words, NYC in the 1970s was truly a dog-eat-dog world.
If you want another fix or two of class-based horror, check out "CHUD" and "Street Trash," both of explore the plight of New York's invisible homeless.
Sure, Stanley Kubrick's 1980 horror film is all about telepathic kids and haunted houses and elevators full of blood. But one of the first bits of fear and tension occurs in the hotel manager's office, where Jack Torrance, a recovering alcoholic who can't seem to hold onto a job, finds himself forced to beg for a gig as the winter caretaker of a resort hotel. Anybody who remembers the travails of searching for a job will recognize this truth: The nightmare isn't being trapped a haunted house -- it's having to grovel to get a job in a haunted house.
Angus Scrimm's Tall Man character is one of the more unnerving monsters in filmland: Not only does he steal the bodies of the dead, but he also steals the souls of towns. As Reggie and Mike travel cross country, it isn't hard to pick up his trail -- they just have to look for boarded-up stores, deserted streets and abandoned homes. Of course, for 1988 audiences facing the effects of outsourcing, the monster emptying out their towns was a little harder to explain.
For another take on the "monsters-as-suburban-economics" metaphor, take a peek at "Poltergeist." Between the unethical developer who didn't bother to relcoate a graveyard and the mindless TV that saps your soul, the Tobe Hooper classic manages to hit a host of cultural touchstones!
A whole subset of horror films is dedicated to rural families living off the land ... and the miserable travelers who happen across their path. It isn't hard to see why it might be an attractive premise: After all, there's no lack of people clinging to the bottom rung of the economic ladder, and it isn't hard to imagine that they may be one paycheck away from having to make their own clothes and hunt their own meat. What happens afterward ... well, that's where it gets really ugly.
If you want even more tips on living off the land (and curious teenagers), you might check out "The Hills Have Eyes," "Wolf Creek" and "Mother's Day." For a funny take on the same premise, try "Tucker and Dale Versus Evil."