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NEW YORK REPORT

US stocks rallied yesterday as investors were relieved that Federal Reserve chairman Ben Bernanke withstood congressional questioning without problems.<br /><br />Retailers and home builders led stocks higher for much of the session, helped by a suprising profit increase from retailer <strong>Bed Bath &amp; Beyond</strong>.<br /><br />Stocks extended gains shortly before midday as investors took Bernanke&rsquo;s hearing in stride.<br /><br />The US House of Representatives Oversight and Government Reform Committee questioned Bernanke on the Fed&rsquo;s role in Bank of America&rsquo;s takeover of Merrill Lynch, and whether he pressured BofA&rsquo;s CEO Ken Lewis to go through with the deal after Lewis raised objections.<br /><br />&ldquo;There was concern as to what might happen there. He seemed to give some pretty decent testimony; at least it didn&rsquo;t get out of hand," said Bucky Hellwig, senior vice president at Morgan Asset Management.<br /><br />The Dow Jones industrial average was up 172.54 points, or 2.08 per cent, at 8,472.40. The Standard &amp; Poor&rsquo;s 500 Index was up 19.32 points, or 2.14 per cent, at 920.26. The Nasdaq Composite Index was up 37.20 points, or 2.08 per cent, at 1,829.54.<br /><br />The Dow snapped a four-day losing streak, while the Dow Jones US home construction index jumped 5.9 per cent.