Stock markets worldwide rise on hopes of US economic recovery

Friday, August 21, 2009

Stock indexes worldwide rose on Friday, after US bank chief Ben Bernanke said that the US economy was starting to recover from the recession.

Addressing a conference in Wyoming, the bank chief said that "the prospects for a return to growth in the near term appear good."

He added, however, that "the economic recovery is likely to be relatively slow at first, with unemployment declining only gradually from high levels."

The Dow Jones Industrial Average gained 155.91 points, or 1.67%, to end the day at 9505.96. The Nasdaq reached 2020.90 points after gaining 1.59%. The Standard & Poor's 500 Index, meanwhile, struck a ten-month high, reaching a level of 1,026.13 at the closing bell, up 1.9%.

The British FTSE index rose about two percent, closing at 4,851. The French Cac index gained 3.1% and the German Dax 2.8%.

"Bernanke was a little bit more bullish than most people were expecting. He's saying that the global economy is starting to emerge from the recession and that the fears of a financial collapse have receded substantially," said Jacob Oubina, the currency strategist of Forex.com.

"I think the market is just taking those headlines as extreme positives for the outlook."

Jean-Claude Trichet, the European Central Bank president, warned that talk of a complete recovery might be premature. "I am a little bit uneasy when I see that, because we have some green shoots here and there, we are already saying, 'well, after all, we are close to back to normal,' " he said.

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Sources

"Markets rise on US recovery hopes" — BBC News Online, August 21, 2009
Kayla Carrick and Elizabeth Stanton. "U.S. Markets Wrap: S&P 500 Hits 10-Month High, Treasuries Drop" — Bloomberg, August 21, 2009

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