NEW YORK — Stocks rose moderately Thursday in relatively quiet trading, a contrast to the heavy selling that occurred a day earlier when Federal Reserve Chair Janet Yellen suggested that stock prices might be too high.
The bigger action was in the bond market. U.S. Treasurys rose sharply in the afternoon, sending benchmark yields lower, a day after a flood of selling.
Yellen caught investors off-guard Wednesday by saying stock values were generally “quite high.” She was speaking in response to a question about risks to financial stability at a conference in Washington.
Historically, Fed officials do not usually offer opinions about market levels. In the mid-1990s, stocks swooned after then-Fed chairman Alan Greenspan used the term “irrational exuberance” when talking about the market.
“Investors remain confused as to where this market wants to go,” said Jonathan Corpina, a managing partner at Meridian Equity Partners.
Many investors agree that the U.S. stock market is trading at stretched levels. Quarterly corporate earnings, off of which stocks ultimately are valued, were better than expected.
Now, with Yellen’s comments, some analysts say stocks are unlikely to advance much farther from here. Investors are paying about $17 for every dollar of earnings in the Standard & Poor’s 500, not excessively high but still above the $15 that investors historically have paid for similar results.
“This market just feels tired. I just see us moving sideways for a while,” said Wayne Wilbanks, chief investment officer at Wilbanks, Smith, Thomas in Norfolk, Va., which manages about $2.4 billion of assets.
The Dow rose 82.08 points, or 0.46 percent, to 17,924.06. The S&P 500 rose 7.85 points, or 0.4 percent, to 2,088, and the Nasdaq composite index rose 25.90 points, or 0.5 percent, to 4,945.54.
The next big thing on investors’ plates will be the April jobs report, which comes out Friday. Economists expect U.S. employers added 215,000 jobs in April and the unemployment rate ticked down to 5.4 percent. The March jobs report was much weaker than Wall Street had anticipated.
