Quote from S2007S:
Can someone wake him up from his dreams and let him know that this recession isnt even going to come close to ending in 2009, can anyone be that foolish to think this recession is going to end, this recession is going to get even deeper as we go into the second half of 2009, he believes all this stimulus is going to make the recession disappear when in reality its just going to cause more problems ahead, if anything, I think it will be closer to a depression then the end of a recession by the end of 2009.
Bernanke: Recession may end in '09; Stocks climb
Stocks rise as Bernanke tells Congress the difficult recession may end this year.
NEW YORK (AP) -- Federal Reserve Chairman Ben Bernanke has steadied Wall Street by telling Congress the recession might end this year.
In his semiannual report to the Senate Banking Committee, Bernanke predicted the economy is likely to keep contracting in the first six months of 2009. But he also said "there is a reasonable prospect" the recession will end this year. He warns that a recovery will require getting credit and financial markets to operate normally.
Bernanke's comments helped the market absorb a worrisome report on consumer spending. The Conference Board's consumer confidence index for February came in at 25, well below expectations. The finding is the latest sign that consumers are deeply worried about the recession and the safety of their jobs.
The Fed chairman spoke a day after the government moved closer to dramatically expanding its ownership stakes in the nation's banks, including Citigroup Inc. The Treasury Department, the Fed and other banking regulators said Monday they could convert the government's stock in the banks from preferred shares to common shares.
The market was up a day after another sharp drop in stocks that left the Dow Jones industrial average and the Standard & Poor's 500 index near 12-year lows. Some bargain-hunting was to be expected after a big pullback; the Dow fell 251 points and the major indexes all fell more than 3 percent.
In midday trading, the Dow rose 44.92, or 0.6 percent, to 7,159.70. On Monday, it had its lowest close since May 7, 1997.
Broader stock indicators also rose. The S&P 500 index rose 6.39, or 0.9 percent, to 749.72. On Monday, it logged its lowest finish since April 11, 1997.
The Nasdaq composite index rose 13.57, or 1 percent, Tuesday to 1,401.29.
The Russell 2000 index of smaller companies rose 4.84, or 1.2 percent, to 399.42.
Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange, where volume amounted to 554.8 million shares.
Many analysts expect the market to remain volatile for the foreseeable future.
Ryan Larson, head of equity trading at Voyageur Asset Management, said the market is looking for insights into the Treasury Department's plans to "stress test" the banks and remove the toxic assets from their books.
"The market is desperately looking for more clues to piece together this bailout," he said.
Investors are focused on Bernanke's comments, he said, but particularly curious about what President Barack Obama has to say during his address to the nation Tuesday night. He is expected to make the case that more has to be done to revive the economy. The speech is scheduled for 9 p.m. EST.
Rich Hughes, co-president of Portfolio Management Consultants in Los Angeles, said any rallies are likely to be based on hope or on rebounds from selloffs. He contends Wall Street still hasn't seen the wrenching decline that is often needed to scare investors from the market and set the ground for a lasting recovery.
"The underlying fundamentals just aren't there to support anything that's sustainable right now," he said. "We haven't seen the capitulation that you'd want to see before you'd get thoroughly enthused."
The market's slide has been tough on long-term savers. An investor who in 1997 had $50,000 in a fund that tracks the S&P 500 would have lost money; the fund would now be worth $46,256. Still, stocks tend to perform better after steep pullbacks and their long-term returns often outpace other investments.
Bond prices were mixed Tuesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.74 percent from 2.76 percent late Monday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.30 percent from 0.29 percent Monday.
The dollar was mixed against other major currencies, while gold prices rose.
Light, sweet crude rose 14 cents to $38.30 per barrel on the New York Mercantile Exchange.
Home Depot Inc. posted a loss but the nation's largest home improvement retailer's results topped expectations when excluding costs for shutting four home-improvement brands. The stock rose $1.25, or 6.7 percent, to $19.96.
Target Corp. and Macy's Inc. said fiscal fourth-quarter earnings fell sharply as shoppers cut back on purchases. Office Depot Inc. posted a loss for the quarter. Target fell $1.20, or 4.2 percent, to $27.23, while Macy's rose 45 cents, or 6.1 percent, to $7.85.
JPMorgan Chase Co. fell 39 cents, or 2 percent, to $19.12 after announcing late Monday it would slash its quarterly dividend to 5 cents from 38 cents in a move to preserve capital to protect itself should the ongoing recession worsen. The decision will save the bank about $5 billion per year.
Stocks fell in afternoon trading in Europe after Monday's drop on Wall Street. Britain's FTSE 100 fell 0.78 percent, Germany's DAX index fell 0.73 percent, and France's CAC-40 fell 0.73 percent. Earlier, Japan's Nikkei stock average fell 1.5 percent.
