Dow now at 12,810, up 47 points.
NEW YORK (AP) — Stocks are jumping as the Federal Reserve
chairman spells out ways that the central bank might act to
stimulate the economy if the threat of deflation, or falling
prices, comes back.
Bernanke’s remarks were far from an actual promise for more
economic stimulus, but markets reacted immediately nonetheless. The
Dow Jones industrial average nearly doubled its morning gains in
ten minutes, and the dollar and U.S. government bond prices fell as
investors shed lower-risk assets.
The Standard & Poor’s 500 rose 15 points, or 1.1 percent, to 1,329
in midday trading Wednesday. The Dow rose 133 points, or 1.1
percent, to 12,580. The Nasdaq composite rose 39, or 1.4 percent,
to 2,821.
In testimony before congress, Bernanke outlined options the Fed
would consider if the economy does not improve.
