Stocks Advance on Bernanke; 10-Year Treasuries Erase Gain
By Michael P. Regan and Nikolaj Gammeltoft
Feb. 24 (Bloomberg) -- U.S. stocks rallied, halting a global retreat, after Federal Reserve Chairman Ben S. Bernanke said the central bank will keep interest rates low to ensure the economic recovery. Ten-year Treasuries erased gains after a record-tying $42 billion sale of five-year notes...
Bernanke told Congress that while policy makers will need to tighten monetary policy at some point, the nascent economic rebound still requires low interest rates for an extended period. An unexpected drop in new U.S. home sales to a record low underscored the vulnerability of the recovery. Stocks extended gains as the Senate approved a $15 billion plan to give companies tax breaks for hiring the unemployed.
The market has been appeased by Bernankes comments, which broke no new ground, said Michael Strauss, who helps oversee about $25 billion at Commonfund in Wilton, Connecticut. The Fed is not ready to withdraw the extended-period phrase because theyre still worried about the fragile nature of the recovery.
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