It was another mixed performance for global markets, with general weakness in Europe turned around in the US session.
US stocks reversed sharp declines to rush higher as investors balanced Fed Chairman Bernanke’s dour view of the economy with the potential for additional stimulus to bolster growth down the road.
In Europe, London’s FTSE 100 shed 33 points (-0.6%) to settle at 5629, whilst the French CAC (-0.1%) and German DAX (+0.2%) were mixed.
European markets edged lower, and the Stoxx Europe 600 slipped 0.3%, turning red at the start of Mr. Bernanke’s testimony.
Weighing on investor enthusiasm were weak data on economic expectations out of Germany and a profit warning from French telecom-equipment giant Alcatel-Lucent.
Stateside, the Dow Jones added 78 points (+0.6%) to settle at 12806, whilst the S&P (+0.7%) and NASDAQ (+0.5%) also enjoyed solid gains.
Bernanke gave few clues that the Fed would take imminent steps to support the US economy in testimony before the Senate Banking Committee.
Investors said Mr. Bernanke’s lack of specifics initially disappointed the markets.
In US economic news, consumer prices were flat in June, in line with expectations, as energy costs continued to fall.
Investors have said the Fed might be less hesitant to roll out additional stimulus measures if inflation is lower.
Industrial production picked up in June, rising slightly more than expectations, according to the Federal Reserve. Meanwhile, capacity utilization increased slightly but fell short of expectations.
Elsewhere, home builders’ confidence in July had the biggest monthly jump in nearly a decade, another sign of optimism in the housing market.
Oil rose to a seven-week high on speculation that inventories fell and as a report showed U.S. industrial production increased in June.
Crude for August delivery increased 79 cents, or 0.9 percent, to $89.22 a barrel on the NYMEX, the highest settlement since May 29. Prices have declined 9.7% this year. The five-day streak of gains is the longest since April 27.
Gold fell for a second day as Bernanke refrained from discussing steps to boost the US recovery, while insisting the central bank will act if labor markets don’t improve.
Today’s session will bring us data in the form of the Melbourne Institute leading index (10:30am, AEST).