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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowFederal Reserve Chairman Ben Bernanke gave Wall Street a double dose of reassurance today. He told Congress that the recession might end this year, and that regulators aren’t planning to nationalize banks.
The news alleviated some of investors’ deepening worries about the economy and the banking system, and the Dow Jones industrial average, coming off its lowest levels since 1997, jumped 236 points. The Dow and other major stock indexes rose more than 3 percent, stemming yesterday’s huge losses.
At close of trading today, the Dow was up 236 points, or 3.3 percent,
to 7,350.94. Yesterday, the major indexes tumbled more than 3 percent,
including the Dow, which fell 251 points. It was the lowest close for
the blue chips since May 7, 1997.
The S&P 500 index rose 29.76 points today, or 4 percent, to close
at 773.10. Yesterday, it logged its lowest finish since April 11, 1997.
The NASDAQ composite index rose 54.11 points, or 3.9 percent, today to close at 1,441.83.
In his semiannual report to the Senate Banking Committee, Bernanke predicted the economy is likely to keep contracting in the first six months of 2009, but that “there is a reasonable prospect” the recession will end this year.
He warned that a recovery will require getting credit and financial markets to operate normally, and that the government must continue working with ailing banks to bring them back to profitability. To the market’s relief, though, the Fed chief said formally nationalizing the banks “just isn’t necessary.”
While Bernanke’s testimony helped ease some pressure on the market, it also came after days of heavy selling that left the Dow Jones industrial average and the Standard & Poor’s 500 index near 12-year lows, so a bounce in stocks wasn’t a surprise as bargain-hunting traders picked up pummeled shares.
The market grew more upbeat as well ahead of a speech by President Barack Obama scheduled for 9 p.m. Beaten-down financial shares gained as the White House said Obama will provide more details about his plans to help stabilize the financial system. The President is also expected to make the case that more has to be done to revive the economy.
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