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Jobless claims and increasingly soggy-looking earnings news could set the tone for stocks Thursday, after a two-day rally fueled by the prospect of more Fed easing.
Stocks rose Wednesday, as Fed Chairman Ben Bernanke testified before a Congressional committee for a second day.
Bernanke repeated his view that the economy has weakened, but he noted the Fed does not see a double dip recession.
He also said the Fed is committed to doing all it can to ensure progress in employment, and that it is ready to take action as needed.
The S&P was up 9, at 1372, just below 1375, its early July high and a point of key resistance. The Dow charged ahead by another 103 points, to 12,908, giving it a 1.4 percent gain over two days.
Bond yields, meanwhile, slid, taking the 10-year yield to 1.479 percent.
The Fed next meets at the end of the month, but many in the markets now expect it to take action at its September meeting.
Now that Bernanke has given his semi-annual testimony to Congress, traders may turn their attention to earnings and the state of the economy.
“I think this rally will fizzle out, and we’ll go back down,” said Andrew Burkly, senior market strategist with Brown Brothers Harriman. “We still think we’re going to the June lows of about 1300 in the next few weeks.”
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