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Stocks rise to record close; Fed flexible on rates

U.S. stocks rose on Tuesday, with the Dow Jones industrial average and Standard & Poor's 500 closing at record highs. Investors cheered new signals that the Federal Reserve is unlikely to begin rising interest rates before June and news that Greece's creditors approved another bailout of the cash-strapped country.

The Dow Jones industrial average rose 92.35 points, or 0.5 percent, to 18,209.19. The Standard & Poor's 500 index added 5.82 points, or 0.3 percent, to 2,115.48. The Nasdaq composite added 7.15 points, or 0.1 percent, at 4,968.12.

In remarks to Congress, Federal Reserve Chair Janet Yellen said the central bank remains "patient" in deciding when to start raising interest rates. She noted that many Americans remain unemployed, wage growth remains sluggish and inflation is running below the Fed's target. That means a rate increase is unlikely for at least the next two meetings, she said. Yellen's testimony supports the view that a rate increase is not likely before June or even later this year. The Fed has kept its benchmark rate near zero since 2008.

"Markets had been very focused on the Yellen testimony and wanted to see if there was going to be any change in the outlook for the first Fed rate hike," said David Lefkowitz, senior equity strategist for UBS Wealth Management Research. "The short answer to that is, not really. The Fed is, at a minimum, not going to do anything imminently."

Home Depot rose after the home-improvement retailer reported fourth-quarter financial results and a full-year outlook that exceeded Wall Street's expectations. The company also said it has authorized an $18 billion buyback of its shares and boosted its quarterly dividend by 26 percent.

Shares in First Solar jumped 1a day after the solar power company said it plans to combine some of its assets with SunPower into an investment vehicle that is intended to provide steady dividends.

Shares in JPMorgan Chase rose on news the bank plans to save $1.4 billion in annual expenses through cost-cutting measures while charging large clients deposit fees.

Macy's reported better-than-expected earnings for the fourth quarter, but the retailer issued a forecast that fell short of Wall Street's expectations.

Rosetta Resources slumped after the oil and gas company reported worse-than-expected fourth-quarter earnings and said it is deferring production growth.

Nine of the 10 sectors in the S&P 500 index rose, led by utilities stocks. Health care stocks declined.

In addition to corporate news, investors also got a batch of new economic data Tuesday. A key gauge of U.S. home prices showed that prices rose 4.5 percent in December versus a year earlier. The small gain comes after price increases slowed for 12 straight months. Meanwhile, the Conference Board reported that its consumer confidence index dropped this month to 96.4 from a revised 103.8 in January. The February and January readings are the highest since before the recession started in December 2007.

"It was not unexpected, but welcome news," said Brad Sorensen, director of market and sector analysis at the Schwab Center for Financial Research. "We don't have to worry about that for at least a few weeks, anyway."

U.S. government bond prices rose. The yield on the 10-year Treasury note held fell to 1.98 percent from 2.06 percent late Monday.

Gold edged down $3.50 to $1,197.30 an ounce, silver lost seven cents to $16.19 an ounce and copper rose six cents to $2.65 a pound.

The price of oil fell for the fifth day in a row on expectations of rising inventories in the U.S. Benchmark U.S. crude fell 17 cents to close at $49.28 a barrel in New York. Brent crude, a benchmark for international oils used by many U.S. refineries, fell 24 cents to close at $58.66 in London.