But Federal Reserve Chairman Ben S. Bernanke cautioned that government efforts to calm financial markets and stem the credit crisis probably won’t result in an immediate economic rebound.
“Stabilization of the financial markets is a critical first step, but even if they stabilize as we hope they will, broader economic recovery will not happen right away,” Bernanke said today in a speech to the Economic Club of New York. “Economic activity will fall short of potential for a time.”
U.S. stocks slid Wednesday afternoon, as the Dow index was down 548.22 points, or 5.89 percent, to 8,762.77 points by 2:20 p.m. The Standard & Poor’s 500 Index fell 65.79 points, or 6.59 percent, to 932.22, while the Nasdaq Composite Index dropped 102.23 points, or 5.75 percent to 1,676.78 points.
Many Asian stock markets were mixed Wednesday. Japan’s Nikkei 225 Stock Average rose, reversing an early decline, as investors sought companies whose earnings are resilient against an economic slowdown.
But Hong Kong’s stocks fell, after the benchmark index posted its biggest two-day jump in more than a decade, on concern mainland Chinese companies will report lower profits and after crude oil prices dropped. And Singapore’s Straits Times Index lost 68.92, or 3.2 percent, to close at 2,059.39, following a two-day, 9.2 percent rally.