U.S. Stocks Close Higher As Fed Vice Chair Hints At Slow Tightening

(RTTNews) - U.S. stocks edged a bit higher on Monday, extending Friday's advance on hopes that geopolitical tensions are easing and on dovish comments from a high-ranking Federal Reserve official.

The major averages advanced through much of the morning, but the Dow Jones Industrial Average failed to sustain most of the early gains.

Small cap stocks performed particularly well, with gains continuing to outpace larger companies.

The S&P 500 rose 5.32 points, or 0.3 percent, to 1,936.91. The Dow Jones Industrial Average blue-chip index closed 16.05 points, or 0.1 percent, higher at 16,569.98. The Nasdaq Composite was up 30.43 points, or 0.7 percent, at 4,401.33.

Monday's advance added to a gain posted on Friday, when markets moved sharply higher on bargain hunting after losses posted in the previous few sessions.

Remarks from a top Fed official helped spur Monday's early gains. U.S. Federal Reserve Vice Chair Stanley Fischer said that U.S. and global recoveries have been "disappointing" so far and the latest recession may have permanently hampered economic potential. The remarks suggested that the Fed's removal of stimulus may happen more slowly than many had thought.

In corporate news, online travel agency Priceline Group Inc. (PCLN) reported increased profit for the second quarter that topped estimates. Shares of Priceline were up 2.1 percent.

Meanwhile Dean Foods Co. (DF) is moving the opposite direction on earnings news. The milk producer reported a loss for the second quarter that narrowed from last year, reflecting higher sales and lower expenses. However, the company reported an adjusted loss for the quarter as well, while analysts' expected the company to report an adjusted profit. Higher raw milk costs weighed on the bottom line. Shares rose 3.9 percent.

Microsoft (MSFT) is rolling out a $25 phone for consumers in Asia and Africa in a clear bid to expand its presence in emerging markets. Shares were flat on the day.

Mannkind (MNKD) rallied 5 percent but finished well off its highs for the session, as the company reached a licensing deal with Sanofi to develop and sell inhaled insulin drug Afreeza in the U.S.

Kinder Morgan (KMI) shares rose 9 percent on a restructuring that will see the oil company acquire its three associated businesses and reorganize as one entity based in Houston.

There were no major economic reports released today.

The sluggish release schedule continues tomorrow, with no top-tier economic figures set to be announced. However, a couple lower-profile releases are due out. The NFIB Small Business Optimism Index, put out by the National Federation of Independent Business, provide a look at confidence among small business owners. Meanwhile, the Labor Department's Job Openings and Labor Turnover Survey is due out today.

The pace of economic releases picks up on Wednesday, with the release of statistics on retail sales. Data on jobless claims, producer prices and industrial production are due out later in the week.

Looking overseas, European stocks surged higher for a second straight session amid hopes that conflicts in Ukraine and the Middle East can be contained. Germany led the advance among the region's major averages, with the DAX index rising by 1.9 percent.

Asian stocks posted gains as well. China's Shanghai Composite index rose 1.4 percent and Japan's Nikkei rebounded from recent losses, jumping 2.4 percent.