NEW YORK REPORT
US stocks rallied yesterday as investors were relieved that Federal Reserve chairman Ben Bernanke withstood congressional questioning without problems.
Retailers and home builders led stocks higher for much of the session, helped by a suprising profit increase from retailer Bed Bath & Beyond.
Stocks extended gains shortly before midday as investors took Bernanke’s hearing in stride.
The US House of Representatives Oversight and Government Reform Committee questioned Bernanke on the Fed’s role in Bank of America’s takeover of Merrill Lynch, and whether he pressured BofA’s CEO Ken Lewis to go through with the deal after Lewis raised objections.
“There was concern as to what might happen there. He seemed to give some pretty decent testimony; at least it didn’t get out of hand,” said Bucky Hellwig, senior vice president at Morgan Asset Management.
The Dow Jones industrial average was up 172.54 points, or 2.08 per cent, at 8,472.40. The Standard & Poor’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.
The Dow snapped a four-day losing streak, while the Dow Jones US home construction index jumped 5.9 per cent.