US stocks up on Bernanke comments

Published:  27 Mar at 6 PM

As reported by the BBC, US stocks ended higher after Ben Bernanke, US Federal Reserve chairman, hinted that the central bank would maintain its supportive monetary policy.

Bernanke told economists in Virginia that the job market was still weak despite strong hiring for three months. The Fed must "remain cautious", said the bank chairman, leading many analysts to understand that interest rates could stay at all-time lows until 2014.

The Dow Jones went up 1.2 percent, while the S&P 500 went up 1.4 percent to 1,416.51 -- its highest figure since May 2008. The Nasdaq gained 1.8 percent and closed at 3,122.57, its best figures since November 2000.

Earlier, EU markets had also finished higher. Across the ocean, the US economy has gained on average 245,000 jobs per month from December - February, while the joblessness rate has decreased to 8.3 percent from 9.2 percent in June 2011.

However, Mr Bernanke said regardless of recent improvements, the job market is still far from normal. The total hours worked and the amount of those working are still significantly under pre-crisis peaks, he explained.

The Fed is concerned that the US economy’s recovery could falter. The market grew at an annual rate of just 3 percent during 2011’s fourth quarter, while economists speculate that growth might have slowed to a yearly pace of 2 percent in 2012’s first quarter.