- The Washington Times - Monday, March 16, 2009

NEW YORK (AP) - Reassuring words from Federal Reserve Board chairman Ben Bernanke and strong gains overseas have Wall Street poised to extend a four-day rally. Futures pointed to a higher opening Monday.

Bernanke said Sunday night the recession would probably end this year if the government’s program to boost the ailing banking sector succeeds. The Fed chairman cautioned that the task of improving the banking system was a difficult one. During an interview with CBS’ “60 Minutes,” Bernanke said the government needs to get banks to lend more freely and get the financial markets to work more normally.

David Hefty, chief executive of Cornerstone Wealth Management in Auburn, Indiana, said Bernanke’s comments were a lift.

“Absolutely it’s reassuring,” Hefty said. “The American people look to these people for that hope.”

But Hefty said Bernanke’s caveat that the end of the recession is predicated on success of the government support for struggling banks is still a major question facing the economy and markets.

Overseas markets were rallying Monday as well. Japanese financial stocks surged on reports that the government would bolster their capital, while British lender Barclays PLC was the latest bank to say it had a good start to 2009.

Dow Jones industrial average futures rose 74, or 1 percent, to 7,306. Standard & Poor’s 500 futures rose 7.6, or 1 percent, to 762.20, while Nasdaq 100 index futures gained 6.25, or 0.54 percent, to 1,174.25.

Investors will get plenty of economic data throughout the week to provide insight into the ongoing recession. The Fed will release a report on February industrial production Monday morning. The report will likely show production declined for the fourth straight month.

It is due out at 9:15 a.m. EDT.

Other data due out this week includes producer and consumer price reports as well as weekly unemployment claims data. The Fed also hosts its regular two-day meeting Tuesday and Wednesday where it sets key interest rates.

Investors are looking to build on last week’s gains that saw the Dow rise 9 percent and the S&P; 500 index jump 10.7 percent. Investors were encouraged by better-than-expected retail sales and upbeat news from some beaten-down banks.

Hefty said momentum from last week’s gains will be the primary driver of gains early this week, and said the effect may last into Tuesday.

“Investors have a stampede mentality,” Hefty said. “They stampede in and they stampede out.”

He said the current rally is unlikely sustainable and mostly will just bring the market back to its November levels.

Citigroup Inc. and Bank of America Corp. _ the banks that have received among the most federal funds _ both said they were performing well through the first two months of the quarter.

Bond prices fell Monday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.99 percent from 2.90 percent late Friday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.22 percent from 0.20 percent late Friday.

The dollar mostly fell against other major currencies, while gold prices fell.

Oil prices fell $1.56, to $44.69 per barrel in premarket electronic trading on the New York Mercantile Exchange.

Overseas, Japan’s Nikkei stock average rose 1.8 percent. In afternoon trading, Britain’s FTSE 100 gained 2.3 percent, Germany’s DAX index rose 2 percent, and France’s CAC-40 rose 2.3 percent.

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On the Net:

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

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