US stocks rally most in a month after Bernanke’s testimony (Lead)February 25th, 2009 - 11:14 am ICT by IANS
New York, Feb 25 (DPA) US stocks made their strongest gains in a month Tuesday after Federal Reserve Chairman Ben Bernanke said that government action could pull the US economy out of a severe recession by later this year.
Testifying to the US Senate Banking Committee, the central bank chief said that the success of the $787 billion stimulus package would be essential to ending a downward economic spiral.
Financial shares made gains after Bernanke said that troubled US banks may not have to be nationalised. Sheila Bair, head of the Federal Deposit Insurance Corp, said she believed the largest US banks currently have enough capital.
JP Morgan Chase late Monday said it was slashing dividends by nearly 90 percent, which would help it save $5 billion per year.
Retailers rose after Home Depot Inc, Macy’s Inc and Nordstrom Inc all reported better-than-expected earnings.
The blue-chip Dow Jones Industrial Average climbed 236.16 points, or 3.32 percent, to 7,350.94. The broader Standard & Poor’s 500 Index rallied 29.81 points, or 4.01 percent, to 773.14. The technology-heavy Nasdaq Composite Index leapt 54.11 points, or 3.9 percent, to 1,441.83.
The US currency dropped against the euro to 77.88 euro cents from 78.76 euro cents Monday. The dollar soared against the Japanese currency to 96.74 yen from 94.64 yen.
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