US MARKET & NEWS 22.7.2009

Stocks finished higher Tuesday with the Dow ending at a 6-month high after a volatile session in which investors weighed
better-than-expected corporate earnings with Federal Reserve Chairman Ben Bernanke's warning that the economic recovery
would be slow. The Dow Jones industrial average gained 0.8% (+67.8 pts, close 8,915.9). The Nasdaq gained 0.4% (+6.9 pts,
close 1,916.2) and the S&P 500 index gained 0.4% (+3.5 pts, close 954.6). In currency trading, the dollar gained against major
currencies, including the euro, British pound and Japanese yen. U.S. light crude oil for August delivery rose 72 cents to settle
at US$64.72 a barrel on the New York Mercantile Exchange. (CNNmoney)
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Federal Reserve Chairman Ben S. Bernanke said while the economy is showing “tentative signs of stabilization,” the
central bank intends to maintain a “highly accommodative” monetary policy for “an extended period.” “The pace of
decline appears to have slowed significantly,” Bernanke said yesterday in semi-annual testimony before the House Financial
Services Committee. At the same time, “in light of the substantial economic slack and limited inflation pressures, monetary
policy remains focused on fostering economic recovery,” he said. Fed officials said in a report submitted as part of Bernanke’s
testimony that policy will be “tightened” when the labour market improves, an economic recovery takes hold and pressures
holding down inflation “diminish.” The comments follow a rally in stocks and a rebound in corporate earnings that have stoked
speculation the worst recession in half a century is ending. (Bloomberg)
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Regional Federal Reserve bank directors expressed concern that rising unemployment and loss of wealth from falling
incomes and house prices posed a risk to recovery from the worst recession in at least half a century. The boards of
directors of all 12 regional Fed banks voted to request leaving the so-called discount rate, or the rate on direct loans to
commercial banks, unchanged at 0.5% in meetings before the Fed’s Open Market Committee gathering in June, the central
bank said yesterday. “While pointing to signs of some stabilization in economic conditions, most notably the slowing pace of
decline in GDP, and to modest improvements in financial markets, they generally considered economic activity to be weak and
the financial system to remain somewhat fragile,” the Fed said in minutes of the Board of Governors’ discussions on the
discount rate. (Bloomberg)
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