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US stocks shift higher ahead of Yellen speech

Stocks are adding to yesterday's gains, though not as briskly as had been expected before the market opened

Janet Yellen, head of the US Federal Reserve
Yellen is set to testify this morning before the US Senate Committee on Banking, Housing and Urban Affairs

Ahead of a speech by Federal Reserve boss Janet Yellen this morning, stocks have added to yesterday’s handsome gains.

The S&P 500 was up three points at 2,086 and the Dow Jones industrial average was 21 points firmer at 17,826.

On the NYSE, communications and information technology services group Neustar Inc (NYSE:NSR) was wanted after it informed investors that it plans to separate into two independent publicly traded companies.

The “A” shares were 6.8% higher at $25.65.

On Nasdaq, a near quadrupling of the share price of Delta Technology Holdings Limited (NASDAQ:DELT) followed the announcement that the Chinese company is dedicating existing production capacity to produce up to 500 tons per year of prothioconazole, a wide spectrum triazoline-thione germicide used to prevent and cure crop diseases.

In contrast, Impax Laboratories Inc (NASDAQ:IPXL) lost a little more than a tenth of its value as it agreed to buy a portfolio of drugs from Israel’s Teva Pharmaceutical Industries Ltd and Ireland’s Allergan PLC (NYSE:AGN) for $586mln.


Preview

Stocks are set to build on yesterday’s strong gains, despite a sharp fall in the price of oil, down 1.6% at $48.57 a barrel.

Janet Yellen, the head of the Federal Reserve, is set to testify this morning before the US Senate Committee on Banking, Housing and Urban Affairs, but that does not seem to have prompted any reticence on the part of investors, judging by spread betting quotes, which point to a 57 point rise for the Dow and a near eight point advance for the broader-based S&P 500.

“Expectations have rapidly diminished over the Fed raising US rates in Q2 and the ongoing Brexit developments have sabotaged all efforts by the central bank to take action,” suggested Lukman Otunuga, a research analyst at forex trading platform FXTM.

“Although data in the States has followed a positive path, the global instabilities and potential threats of a Brexit to the global economy continues to force the central bank to re-evaluate its stance,” Otunuga added.

In corporate news, house builder Lennar Corporation (NYSE:LEN) cheered the market with news that the number of home sales secured in its fiscal second quarter was up 12% year-on-year, with the average price rising 4.0% to $364,000.

The shares were up 2.9% in pre-market trade, as earnings per share numbers (EPS) beat market expectations. The market had been expecting EPS of 86 cents, which the company beat by nine cents.

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