Stocks Climb as Bernanke Says Recovery Continues

Stocks are climbing after Federal Reserve Chairman Ben Bernanke said debt problems inEurope might only amount to a "modest" drag on the U.S. economy if the financial markets can halt their slide.

Bernanke has told the House Budget Committee on Wednesday that the economy is recovering but that jobs and housing are likely to remain weak.

The market is also getting a lift from a stronger euro. The 16-nation currency has climbed back above $1.20. That's a sign of increasing confidence in Europe's ability to contain its debt problems.

At midday, the Dow Jones industrials are up 117 at 10,057. The Dow fell below 10,000 on Friday.

The Standard & Poor's 500 index is up 14 at 1,076, while the Nasdaq composite index is up 34 at 2,205.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

NEW YORK (AP) — Stocks climbed Wednesday after Federal Reserve Chairman Ben Bernanke said debt problems in Europe might only amount to a "modest" drag on the U.S. economy if the financial markets can halt their slide.

The Dow Jones industrial average rose 113 points in late morning trading. The Dow and broader indexes all tacked on more than 1 percent.

Bernanke's comments came in testimony to the House Budget Committee. He said the economy is still recovering but that jobs and housing are likely to remain weak.

"We do put the odds pretty high that Bernanke is correct and that this is more short-term blip than anything else," said David Chalupnik, head of equities at First American Funds inMinneapolis.

The market also got a lift from a stronger euro, which climbed back above $1.20. The move in the 16-nation currency past that psychological level was a sign of increasing confidence in Europe's ability to contain its debt problems.

Traders have been anxious since last month about the health of Europe's economy. Governments across Europe are planning deep spending cuts to reduce debt. The worry is that lower spending there will slow down an economic recovery in Europe, which in turn could put a drag on other regions. Major stock indexes have fallen into a "correction," which is a drop of more than 10 percent from their recent highs.


Markets worldwide have regularly been taking a cue from the euro in recent weeks because it is seen as a proxy for confidence in Europe's economic health.

In early morning trading, the Dow Jones industrial average rose 39.00, or 0.4 percent, to 9,978.98. The Standard & Poor's 500 index rose 5.33, or 0.5 percent, to 1,067.33, while the Nasdaq composite index rose 13.54, or 0.6 percent, to 2,184.11.

 

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