US STOCKS-Dow, S&P end at record highs on Macy's, Yellen

Reuters

* Macy's sales rise more than expected; shares jump

* U.S. stock futures rise on Fed chief nominee Yellen'sremarks

* Yellen's confirmation hearing slated for Thursday

* Dow up 0.5 pct; S&P 500 up 0.8 pct; Nasdaq up 1.2 pct

By Caroline Valetkevitch

NEW YORK, Nov 13 (Reuters) - The Dow and the S&P 500 endedat record highs on Wednesday as strong results from Macy's lifted consumer discretionary shares and investors bought stocksin anticipation of remarks by Janet Yellen, who is likely tobecome the first woman to lead the Federal Reserve.

U.S. stock index futures rose to session highs after thebell following the release of Yellen's introductory remarks, ahead of her confirmation hearing on Thursday to succeed FedChairman Ben Bernanke. Yellen, who is the Fed's vice chair, willappear before the Senate Banking Committee.

In the prepared remarks, Yellen said the U.S. central bankhas "more work to do" to help an economy and a labor market thatare still underperforming, suggesting to some analysts that anyscaling back of the Fed's stimulus program might not be rightaround the corner. Yellen has been a strong supporter of theFed's bond-buying program.

"It's not a policy statement or anything, but I think hertone as far as potentially staying with easy money longer thanmight have been the case otherwise might be what the market'sreacting to," said Alan Lancz, president of Alan B. Lancz &Associates Inc., an investment advisory firm in Toledo, Ohio."It's just reconfirming everything."

Investors had been speculating that the Fed could startreducing its bond-buying program as early as December after lastweek's robust data on U.S. payrolls and economic growth.

Shares of Macy's shot up 9.4 percent to $50.68, a recordclosing high, after the U.S. department store operator saidpromotions had increased sales and business was improving aheadof the holiday season. The stock's rally on Macy'sstronger-than-expected earnings spurred demand for consumerdiscretionary shares. During the session, Macy's stock hit a52-week high at $50.95.

The Dow Jones industrial average rose 70.96 points,or 0.45 percent, to end at 15,821.63, a record close. The Dowalso hit an all-time intraday high of 15,822.98. The Standard &Poor's 500 Index gained 14.31 points, or 0.81 percent, tofinish at 1,782.00, which was both a record closing high and anall-time intraday high.

The Nasdaq Composite Index climbed 45.66 points, or1.16 percent, to close at 3,965.58.

Cisco Systems Inc shares gained 1.12 percent toclose at about $24 ahead of the release of the network equipmentmaker's earnings.

After the bell, Cisco's stock fell 10.6 percent after thecompany warned that its revenue would drop between 8 percent and9 percent in its second fiscal quarter.

During the regular session, the S&P consumer discretionarysector index jumped 1.6 percent, leading the benchmarkS&P 500's advance.

Macy's was among the first of several retailers expected toreport earnings in the coming days.

"Macy's reported blowout numbers. It's had a positive impacton everything else consumer related today. I think people'sexpectations were pretty low for holiday shopping, and I thinkthat woke a lot of people up," said Michael James, managingdirector of equity trading at Wedbush Securities in Los Angeles.

Macy's forward price-to-earnings ratio, at 11.4, is belowthat of the S&P 500, which is at 15. But consumer discretionaryshares, which have led S&P 500 sector gains this year, areconsidered among the priciest in the index. The sector has a P/Eratio of 17.8, according to Thomson Reuters StarMine data.

The S&P 500 also found support from technology stocks, withshares of NetApp rising 2.7 percent to $41.29 ahead ofthe company's results after the close.

After the bell, NetApp's stock slipped 0.2 percent to $41.20following the release of its results.

During the regular session, Macy's was the S&P 500's biggestpercentage gainer.

Among other retail stocks, Wal-Mart Stores Inc. shares edged up 0.2 percent to $78.90 a day ahead of itsquarterly earnings.

Home Depot Inc, which is set to report results nextweek, gained 1.9 percent to $77.60 and bolstered the Dowindustrials.

In addition to Yellen's testimony on Thursday, investors areawaiting a speech from Bernanke. The Fed chairman is scheduledto speak at 7 p.m. on Wednesday (midnight GMT), though the topicis not specific to monetary policy. A question-and-answersession will follow.

About 6.034 billion shares traded on the New York StockExchange, the Nasdaq and the NYSE MKT, slightly below thefive-day average closing volume of about 6.34 billion, accordingto BATS exchange data.

Advancers outnumbered decliners on both the NYSE and theNasdaq by a ratio of slightly more than 2 to 1.

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