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U.S. stocks trade rocket higher on Bernanke's words; Dow soars 1.23%

Published 03/26/2012, 04:43 PM
Updated 03/26/2012, 04:45 PM
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Investing.com - U.S. stocks traded rocketed higher Monday, hitting the highest levels since 2008,  as Fed Chief Ben Bernanke stated that additional monetary easing may be needed to combat the sluggish employment data.

 Near the close of  U.S. trade, the Dow Jones Industrial Average added 1.23%, the S&P 500 advanced 1.39%, while the Nasdaq Composite soared 1.78%.

Igniting the worldwide equity rally, Fed Chairman Ben Bernanke stated that further monetary accommodation is needed to bring about big gains in the U.S. jobs market, which he described as “far from normal,” despite a recent improvement.

However, an industry report showed that pending home sales in the U.S. declined unexpectedly in February, indicated that the recovery in the housing market remains uneven, capping the rally.

The National Association of Realtors said its pending home sales index fell by 0.5% last month, confounding expectations for a 1.0% gain. Pending home sales rose by 2.0% in January.

Meanwhile, German Chancellor Angela Merkel said earlier that Germany would be prepared to allow running the region’s two bailout funds in parallel, increasing the size of the bailout facility.  This action would provide a total fund of EUR700 billion to combat the debt crisis in the single currency bloc.

Stocks also found support after a report showed that German business confidence improved in March.

The Ifo Institute said earlier that its index of German business confidence inched up to 109.8, from a reading of 109.6 in February. Analysts had expected the index to ease up to 109.7 this month.   

Arena Pharmaceuticals soared 23% due to addressing the concerns of a FDA panel concerning its weight loss drug in a written response prior to the May 10 meeting.

Lions Gate Entertainment climbed 4.3% after Hunger Games set a record for the company during the movie’s opening weekend.

At the close of European trade, the EURO STOXX 50 traded higher by 0.57%, France's CAC 40 gained 0.74%, while Germany’s DAX surged 1.20%.  Meanwhile, in the U.K. the FTSE 100 added 0.82%.

Investors are awaiting German consumer climate, U.S. consumer confidence and a speech by Fed Chairman Ben Bernanke on Tuesday.

 


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