* Fed's Dudley ties bond buying to impact of U.S. fiscal
* Home Depot raises outlook, shares hit record intraday high
* Goldman Sachs sees S&P 500 at 1,750 by year-end
* Dow up 0.3 pct, S&P 500 up 0.2 pct, Nasdaq up 0.2 pct
By Angela Moon
NEW YORK, May 21 (Reuters) - U.S. stocks rose on Tuesday,
with the Dow and the S&P 500 closing at new all-time highs as
Federal Reserve officials' comments eased some concerns that the
central bank could start reducing its stimulus program.
Dow component Home Depot gave the market a lift after the
world's largest home improvement chain raised its profit
outlook, driving its stock to a record intraday high.
JPMorgan also bolstered the Dow, rising more than 1 percent
to a 52-week high after the bank's chief executive won a vote of
confidence from shareholders.
Stocks extended gains in afternoon trade after New York Fed
President William Dudley said he cannot be sure whether
policymakers will next reduce or increase the amount of
purchases, due to the "uncertain" economic
Earlier, James Bullard, president of the Federal Reserve
Bank of St. Louis, had urged the European Central Bank to
consider employing a U.S.-style quantitative easing program to
counter slowing inflation and recession in the euro zone.
"There's been increasing concerns that the time has come for
the Fed to take some of the stimulus out of this market,
especially with stocks at these levels. What we heard from the
Fed officials today basically gave a temporary additional shot
to the market," said Rick Meckler, president of hedge fund
LibertyView Capital Management LLC in Jersey City, New Jersey.
"But there is only so much you can move from the low
interest-rate policy," Meckler said. "It has got to translate
into economic news or earnings news and that's why the market
has remained largely unchanged."
The Fed's $85 billion-per-month bond buying program has
played a significant role in the market's rally and investors
have recently become nervous over when the central bank will
alter or halt the program.
The Dow Jones industrial average gained 52.30 points,
or 0.34 percent, to end at a record 15,387.58. The Standard &
Poor's 500 Index added 2.87 points, or 0.17 percent, to
finish at a record 1,669.16. The Nasdaq Composite Index
advanced 5.69 points, or 0.16 percent, to close at 3,502.12 -
its highest close since October 2000.
The Dow climbed to an all-time intraday high at 15,434.50,
while the S&P 500 hit a record intraday high at 1,674.93.
The Nasdaq set a fresh 52-week high at 3,512.15.
After a rally of about 17 percent for the major U.S. stock
indexes since the start of the year, investors are trying to
assess how much further equities can run.
Goldman Sachs said in a note to clients dated May 20 that it
sees the S&P 500 at 1,750 by the end of the year - up 5 percent
from Monday's close - and expects a 12-month rally to 1,825.
The bank's economists forecast above-trend growth in U.S.
gross domestic product in 2014 - for the first time in six
The small- and mid-cap Russell 2000 continued to face
technical resistance at the 1,000-point level, but the index
hovered around its all-time closing high.
The housing market's recovery helped Home Depot
report higher quarterly sales and earnings, prompting the
world's largest home improvement chain to raise its sales
outlook for the year. Home Depot was the Dow's second-biggest
percentage gainer, rising 2.5 percent to close at $78.71 after
hitting an intraday record high of $79.46.
JPMorgan Chase & Co shareholders voted to allow CEO
Jamie Dimon to keep his chairman title, sending the bank's
shares up 1.4 percent to $53.02 at the close.
Earlier, the stock set a fresh 52-week high at $53.67.
On Wednesday morning, investors will be parsing testimony by
Fed Chairman Ben Bernanke before a congressional panel, the
Joint Economic Committee. The minutes of the Fed's latest
policy-setting meeting will be released on Wednesday afternoon.
"Central banks have been flooding the world with liquidity,
and one place that's gone is into the stock markets," said Brian
Gendreau, market strategist at Cetera Financial Group, based in
Still, a reduction or end of the current quantitative easing
program wouldn't necessarily mean the end of the rally, as a
better economic outlook should offset the change to monetary
policy, Gendreau said.
Apple Chief Executive Tim Cook testified before
Congress after a U.S. Senate report on the company's offshore
tax structure said the iPhone maker has kept billions of dollars
in profits in Irish subsidiaries to pay little or no taxes to
any government. Apple shares fell 0.7 percent to $439.66.
Volume was roughly 6.15 billion shares on the New York Stock
Exchange, the Nasdaq and the NYSE MKT, slightly lower than the
year-to-date average daily closing volume of about 6.34 billion.
Advancers outnumbered decliners on the NYSE by a ratio of 8
to 7, while on the Nasdaq, about 13 stocks rose for every 12