Today: New Federal Reserve chief Janet Yellen testifies in front of Congress for the first time and stocks spike in response, sending Google and Tesla to record highs.
The Lead: Janet Yellen's first congressional testimony sends stocks soaring
New Federal Reserve Chair Janet Yellen appeared in front of Congress for the first time Tuesday, telling lawmakers that she will continue on the path established by predecessor Ben Bernanke, a theme that seemed to appeal to investors, who sent stocks higher on Wall Street.
Yellen -- who spent decades teaching at UC Berkeley, twice winning the top teaching award at Cal's Haas School of Business, and six years running the Fed's San Francisco region -- takes over for Bernanke just as the central bank is pulling back on billions in bond purchases meant to help stimulate the economy in the wake of the Great Recession. The reduction in bond purchases has been called into question by a drop in job growth during December and January, but Yellen told the House's Financial Services Committee on Tuesday that it would take many more signs that the economy is stumbling to alter the Fed's path.
"Since the financial crisis and the depths of the recession, substantial progress has been made in restoring the economy to health and strengthening the financial system. Still, there is more to do," Yellen said.
Yellen's testimony led many to conclude that the Federal Reserve will continue to chop $10 billion off its monthly bond purchases every month, just as it has the past two months.
"It's very obvious she is working from the same playbook as Bernanke," RBC Capital Markets chief U.S. economist Tom Porcelli told Reuters. "The Fed will continue to cut its bond purchases by $10 billion at each policy meeting the rest of the year."
Wall Street seemed elated at the certainty Yellen offered in her testimony, as well as an expected deal in the House to raise the debt ceiling, avoiding another congressional showdown similar to one that shut down the federal government last year.
"No one was really expecting a major debt ceiling showdown or changes in tapering, but anticipation is one thing, and the experience is another," Pioneer Investment Management portfolio manager John Carey told Reuters. "Everyone is more relaxed now that those issues are officially off the table."
All three major U.S. stock indexes gained more than 1 percent on the day, pushing the Standard & Poor's 500 atop 1,800 and the Dow Jones industrial average to the brink of 16,000.
SV150 market report: Google, Tesla hit record highs, Apple gains again
Silicon Valley stocks joined in Tuesday's gains, with the SV150 also gaining more than 1 percent as Google rose to a record high and Tesla Motors continued Monday's momentum to crack the $200 level for the first time.
Google moved as high as $1,191.87, pushing its market capitalization higher than $400 billion for the first time, before closing with a 1.5 percent gain at $1,190.18. The Mountain View Internet giant, which passed Exxon Mobil last week to become the second-most valuable company in the world, announced after Monday's trading session that it had been selected by the federal government to take control of its hometown landmark, NASA's Moffett Field, and reskin Hangar One. Bloomberg News reported Tuesday morning that Google had become the top dealmaker in the world, surpassing Santa Clara chipmaker Intel, which placed third on the list, which analyzed buying and selling action from the past three years. One deal that brought Google a lot of attention, the purchase of robotics company Boston Dynamics, was brought into focus again by a report that said Google will work with Asian manufacturing company FoxConn to develop its robotic vision. On the same day that activists organized a call to action against NSA spying called "The Day We Fight Back," Google partnered with several other major tech companies -- Facebook, Yahoo, Twitter, AOL, LinkedIn and Microsoft -- to join in the protest and call for greater limits on data collection and more transparency on data requests.
Tesla moved higher than $200 for the first time, moving as high as $202.20 before closing with a six-cent gain at $196.62 as the Palo Alto electric car company faced another state fight against its sales structure, this time in Ohio. Apple gained for a second consecutive day after activist investor Carl Icahn gave up his fight to convince the Cupertino company to buy back more stock, with the iPhone maker promoting a new executive in charge of human resources and fighting a patent lawsuit that seeks more than $2 billion. Twitter gained 2 percent to $54 as a Mashable report suggested the San Francisco company is headed for a Facebook-like redesign, while Yelp increased 1.8 percent to a new closing record price of $92.78 before announcing its own redesign after the bell. Hewlett-Packard advanced 1.9 percent to $29.36 while facing heat for a change in its server-service policy, and Yahoo added 2 percent to $38.50 while making yet another small acquisition in the mobile space.
Santa Clara-based networking-software company Infoblox suffered the largest tumble Tuesday in the SV150, plummeting 48.1 percent to $17.19 after announcing forecasts well below expectations Monday afternoon. Intuit's downturn occurred after the session ended, with the Mountain View software company tumbling in late trading after announcing weaker-than expected January earnings due to a late start to tax season, which is important for the company's tax-related software. Milpitas security company FireEye, which has been on fire since acquiring Mandiant for $1 billion earlier this year, cooled down in after-hours trading following an earnings report that included a current-quarter forecast below expectations. Fellow security company Palo Alto Networks, which is facing a more robust challenge from FireEye, gained 1.7 percent to $68.89 after a report suggested the Santa Clara company is closing in on its own acquisition.
Up: Workday, Applied Materials, Splunk, Nvidia, Pandora, Facebook, Twitter, Electronic Arts, Yahoo, AMD, HP, Yelp, Intuit, Palo Alto Networks, Symantec, Zynga, Google, Oracle, Apple
Down: SolarCity, LinkedIn, Ruckus, Cisco, Juniper
The SV150 index of Silicon Valley's largest tech companies: Up 16.77, or 1.1 percent, to 1,538.19
The tech-heavy Nasdaq composite index: Up 42.87, or 1.03 percent, to 4,191.04
The blue chip Dow Jones industrial average: Up 192.98, or 1.22 percent, to 15,994.77
And the widely watched Standard & Poor's 500 index: Up 19.91, or 1.11 percent, to 1,819.75
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/jowens510.