Wall Street reacts cautiously to Bernanke

After gains on Tuesday, New York equities markets were at a virtual standstill at midday on Wednesday as analysts and investors considered what the implications were of new US Federal Reserve Chairman Ben Bernanke’s comments in his first appearance before the US Congress. He said that more interest rate hikes could be in the offing but that the economy seemed to be doing well.

By the middle of the trading day, the Dow Jones Industrial Average hadn’t moved at all, while the Nasdaq composite and the S&P 500 were both up slightly. The Dow was at 11,029.19. The Nasdaq had risen 0.3 percent to 2,268.91, and the S&P had gone up 0.1 percent to 1,276.39.

In the financial sector, Merrill Lynch was up 0.5 percent to $75.52 on the announcement that it will merge its investment management division with Black Rock, which gained 9.6 percent to $159.99. The new company will do business under the Black Rock name.

Elsewhere in banking and finance, Bank of New York and Bear Stearns were both up on upgrades from “neutral” to “buy” from Merrill Lynch. Bank of New York was upgraded on the strength of its processing and banking businesses, and gained 1.1 percent to $33.84. Bear Sterns received an upgrade because Merrill Lynch said its share price does not reflect its potential earnings growth, which sent its shares up 2.1 percent to $132.21.

Despite lower crude oil prices on Tuesday and Wednesday data showing stockpiles up, oil stocks were on the rise. Marathon Oil gained 3.7 percent to $68.97, while Valero Energy was up 3.3 percent to $51.39.

In the retail sector, Abercrombie & Fitch lost 4.2 percent to $65.89 despite reports of a 58 percent rise in profits in the fourth quarter. The loss came due to a warning that full-year earnings were likely not going to meet expectations.