Wall Street Surges on Bernanke Remarks
Friday November 30, 10:09 am ET
By Madlen Read, AP Business Writer Stocks Rise After Federal Reserve
Chairman Ben Bernanke Bolsters Hope for Rate Cuts NEW YORK (AP) -- Wall
Street soared Friday, resuming this week's rally after Federal Reserve Chairman
Ben Bernanke gave investors more reason to believe further interest rate cuts
are on the way. The Dow Jones industrial average rose more than 120 points in
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In a speech late Thursday, Bernanke said persistently tight credit
conditions, the housing slump and high energy prices will probably create some
"headwinds for the consumer in the months ahead." The central bank will have
to be "exceptionally alert and flexible," Bernanke said, echoing comments by
Fed Vice Chairman Donald Kohn earlier in the week that helped Wall Street
recover some of
its recent steep losses. Investors read those words as a sign that the Fed is
willing to lower interest rates again, after cutting rates at the past two
meetings. The Fed meets again on Dec. 11, and a rate cut could help
reinvigorate the slowing economy. Evidence of a more reticent consumer came
Thursday in the Commerce Department's latest report, which showed consumer
spending rose a modest 0.2 percent in October, the slowest pace in four months.
In early trading, the Dow advanced 121.85, or 0.92 percent, to 13,433.58.
Broader stock indicators also rose. The Standard & Poor's 500 index rose 14.80,
or 1.01 percent, to 1,484.52, and the Nasdaq composite index added 16.83, or
0.63 percent, to 2,684.96. Government bonds fell as investors pulled their
money out of the safe securities and put it back into stocks. The yield on the
benchmark 10-year Treasury note, which moves opposite the price, rose to 4.02
percent from 3.94 percent late Thursday. Crude oil fell $1.41
to $89.60 a barrel on the New York Mercantile Exchange, dipping below $90 for
the first time since October.
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