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Sunday 23rd of August 2009
August 21, 2009

Fed statement boosts stock markets


by Kay Murchie
Fed statement boosts stock markets

Federal Reserve chairman Ben Bernanke said today the prospects for economic recovery “appear good” and sent global stock markets higher.

The Dow Jones index gained 1%, London’s FTSE 100 index climbed 2% to close at 4,850.89. Germany’s Dax index rose 2.8%, while France’s Cac 40 added 3.1%.

Mr Bernanke’s comments came at a speech in the annual central bankers’ retreat in Jackson Hole, Wyoming.

Mr Bernanke told the conference: “After contracting sharply over the past year, economic activity appears to be levelling out, both in the United States and abroad, and the prospects for a return to growth in the near term appear good.”

However, the Fed chief expressed his concern for the ongoing difficulties in obtaining credit, which could cause a problem for both companies and consumers and “because of these and other factors, the economic recovery is likely to be relative slow at first, with unemployment declining only gradually from high levels.”

Mr Bernanke was also optimistic about prospects for the global economy. “After contracting sharply over the past year, economic activity appears to be levelling out, both in the United States and abroad,” he said.

In other news for the world‘s largest economy, figures showed sales of existing US homes rose by more than 7% in July to an annual rate of 5.24 million houses - the largest monthly increase in the 10 years that the National Association of Realtors started gathering data.

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