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Stock indexes close slightly higher a day after a drop

The Dow closes up 82 points to 17,924

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 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, which are ultimately what stocks are valued off of, were better than expected, but those expectations were low in the first place.

Now, with Yellen's comments, some analysts say stocks are unlikely to advance much further 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 have historically 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 in assets.

The Dow rose 82.08 points, or 0.5 percent, to 17,924.06, effectively erasing the losses from the previous prior. 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.

Even with today's gains, the major indexes are down between 0.6 percent and 1.2 percent for the week.

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, so economists and investors are going to be looking for any significant revisions to the previous numbers.

The bond market had a neck-twisting day as bond prices rose sharply. The yield on the 10-year Treasury note fell to 2.19 percent from 2.25 percent late Wednesday, an unusually large move.

Among individual companies, Whole Foods Market lost $4.65, or 10 percent, to $43.07 after the company's reported sales growth for the first quarter that was weaker than analysts had expected.

Yelp jumped $8.79, or 23 percent, to $47.01 after The Wall Street Journal reported that the online review website is exploring a sale.

In energy markets, oil fell more than 3 percent because of gains in the U.S. dollar, which makes oil more expensive for holders of other currencies.

U.S. oil dropped $1.99, or 3.3 percent, to $58.94 per barrel. That marked the biggest drop in U.S. oil since April 8. Brent crude, a benchmark for international oils used by U.S. refineries to make gasoline, fell $2.23 to $65.54 per barrel.

In trading in other energy futures, wholesale gasoline fell 4.6 cents to $1.99 per gallon, heating oil dropped 5.4 cents to $1.962 per gallon and natural gas fell 4.2 cents to $2.734 per 1,000 cubic feet.

The dollar rose to 119.77 yen from 119.32 yen. The euro fell to $1.1271 from $1.1354.

The price of gold fell $8.10 to $1,182.20 an ounce, silver fell 21 cents to $16.30 an ounce and copper fell a penny to $2.92 a pound.

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