Stocks edged higher Wednesday in early trading on Wall Street after several major companies reported earnings gains and Federal Reserve Chairman Ben Bernanke said the central bank had no firm timetable for cutting back on its bond purchases.
Bernanke said that the bank would consider reducing its stimulus program if the economy improves, but emphasized that the reductions were "by no means on a preset course," according to a prepared text of Bernanke's testimony before Congress, which began Wednesday morning.
The central bank is currently buying $85 billion of bonds a month to keep interest rates low and encourage borrowing. Concerns that the Fed was poised to start easing back on that stimulus before the economy had recovered sufficiently caused the stock market to pull back in June.
"The market is responding well," to Bernanke's comments, said Phil Orlando, chief market strategist at Federated Investors. The concern has been that "the Fed was going to dial the (stimulus) down to zero regardless how the economy was doing."
The Dow Jones industrial average rose 21 points, or 0.1 percent, to 15,472, in late-morning trading. The Standard & Poor's 500 index climbed four points, or 0.2 percent, to 1,680. The NASDAQ composite gained eight points, or 0.3 percent, to 3,607.
Bernanke's comments also had an impact on the Treasury market.
The yield on the 10-year Treasury note fell after Bernanke's comments as investors bought U.S. government bonds. The yield fell to 2.48 percent from 2.53 percent on Tuesday. The yield has been gradually declining since July 5, when it surged to 2.74 percent after the government reported that hiring was strong in June.
If Treasury yields rise too fast, it worries concern stock investors because of the impact that rising interest rates have on the wider economy. Higher mortgage rates, for example, would slow demand for homes.
The stock market has climbed back to record levels following a brief slump in June, when the S&P 500 logged its first monthly decline since October on concern that the Federal Reserve would ease back on its economic stimulus too quickly. The S&P 500 has gained 4.7 percent in July and the Dow is 3.8 percent higher.
Investors are also keeping an eye on company earnings during one of the busiest weeks for second-quarter profit reports.
Bank of New York Mellon gained 85 cents, or 2.9 percent, to $31.23, after the bank posted earnings that beat analysts' expectations. The lender said its net income surged in the second quarter as market conditions improved and it collected more fees for managing investments. Bank of America rose 16 cents, or 1.2 percent, to $14.08 after it too reported surging earnings for the period, helped by cost-cutting and investment banking gains.
Banks and financial companies are expected to report the strongest earnings growth of all S&P 500 companies, according to data from S&P Capital IQ. The growth for the sector is expected to reach almost 20 percent, according to the data provider. That compares to the average growth of 3.4 percent forecast for all companies.
In commodities trading, the price of crude oil rose 20 cents, to $106.20 a barrel. Gold fell $10.20, or 0.8 percent, to $1,295.20 an ounce.
The dollar rose against the euro and the Japanese yen.
Among other stocks making big moves Wednesday:
— Yahoo rose $1.90, or 7.1 percent, to $28.78, after the company reassured investors that it would keep buying back its own stock. The internet company had already spent $3.6 billion buying back about 190 million of its shares since last year.
— American Express Co. fell $3.35, or 4.3 percent, to $74.92, after a report said European regulators are proposing to cap the lucrative processing fees the card company imposes.
— Mattel fell $2.48, or 5.3 percent, to $43.85, after its second-quarter net income fell 24 percent, hurt by weak sales in North America and continued softness in Barbie sales, as well as an asset impairment charge.