Wall Street opens higher, building on 4-day rally

NEW YORK (AP) - Investors buoyed by comments on the economy from Federal Reserve Chairman Ben Bernanke sent stocks mostly higher Monday. The Dow Jones industrials and Standard & Poor’s index rose for a fifth straight day.

Bernanke said Sunday the recession would probably end this year if the government’s program to boost the banking industry succeeds. But the Fed chairman also cautioned that the task of improving the banking system is 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 the success of the government support for struggling banks is still a major question facing the economy and markets.

Analysts said the market’s latest advance supported the theory that stocks had found a bottom earlier this month.

“We’re starting to build a base here,” said Douglas Kreps, a managing director at Fort Pitt Capital Group. “We may not be getting better, but we’re getting worse at a slower rate.”

Kreps added that each day that goes by without disappointing news can help further strengthen that base. “Being able to go a week or more without bad news,” is a good sign, he said.

In late morning trading, the Dow Jones industrial average rose 61.17, or 0.85 percent, to 7,285.15. The Standard & Poor’s 500 index rose 7.09, or 0.94 percent, to 763.64, while the Nasdaq composite index fell 12.49, or 0.87 percent, to 1,419.01.

Investors are building on last week’s gains that saw the Dow rise 9 percent and the S&P; 500 index jump 10.7 percent.

Advancing issues outnumbered decliners by about three to one on the New York Stock Exchange, where volume came to 428 million shares.

Gains on overseas market also fed the advance in the U.S. Japanese financial stocks surged on reports that the government would bolster their capital, while British investors were reassured by the Barclay’s news.

Japan’s Nikkei stock average rose 1.8 percent. In afternoon trading, Britain’s FTSE 100 gained 1.7 percent, Germany’s DAX index rose 1.1 percent, and France’s CAC-40 rose 2.2 percent.

Bernanke’s comments come as some of the hardest hit banks have said in recent days that operations were improving in early 2009. Last week, both Citigroup Inc. and Bank of America Corp., reported improving trends for January and February; Citi’s news ignited the rally that carried over to Monday’s trading.

British bank Barclays PLC said Monday its operations were also improving.

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