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The Dow Jones Industrial Average (DJINDICES:^DJI) and S&P 500 shot to record highs today on the backs of astrong earnings report from Macy's (NYSE:M) and dovish statements from Federal Reserve Chair nominee Janet Yellen. In remarks prepared for her confirmation hearings, Yellen said, "I believe that supporting the recovery today is the surest path to returning a normal approach to monetary policy," and added that there is "more work to do" to fix the economy. For investors who have cheered on the Fed's easy money policy throughout the year, her words were catnip, but skeptical Republicans, who have been critical of current Chair Ben Bernanke, may give her the third degree tomorrow in hearings. Still, she is widely expected to win confirmation from the Senate.

Meanwhile, shares of Macy's, one of the nation's largest retailers, jumped a whopping 9.4% after the department-store chain said that profits soared 22% last quarter. Because Macy's is the first major retailer to report earnings, it is often seen as bellwether for the industry, and its report seems to have surprised, as retail had been weak over the past few months. Earnings per share rose to $0.47, up from $0.36 a year ago, and easily beat estimates of $0.39. Revenue moved up 3% to $6.28 billion, topping the consensus at $6.19 billion, and same-store sales grew a respectable 3.5%. Looking ahead to the holiday shopping season, Macy's CFO Karen Hoguet noted that typical gift items were selling well, as were winter-weather items. We'll probably learn more about what retailers expect for the holiday season when Wal-Mart reports earnings after hours tomorrow.

Cisco Systems (NASDAQ:CSCO) was not as fortunate in its earnings report, dropping 10% after hours as poor guidance sent investors fleeing. The world's largest maker of networking equipment said adjusted earnings per share came in at $0.53, beating expectations of $0.51, but revenue grew just 2% to $12.09 billion, missing the analysts' mark. What really seemed to spook the market was the company's warning that revenue could fall as much as 10% in the current quarter, as CEO John Chambers said that government ineptitude in the shutdown and debt ceiling debate had "exacerbated the lack of confidence among business leaders." Expect the Nasdaq to fall tomorrow, as Cisco is widely viewed as a bellwether for the tech industry, since its performance tends to be reflective of business and government spending on tech products and services.

Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool recommends Berkshire Hathaway and Cisco Systems and owns shares of Berkshire Hathaway. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.