United Statesâ€™ stocks rose on Wednesday after Federal Reserve Chairman Ben Bernanke reaffirmed his commitment to keep interest rates low for an extended period to sustain the still-fragile recovery.
Bernanke gave a somber view of the economy, which was echoed by a separate report showing new home sales unexpectedly slumped to a record low in January. But investors were encouraged by the likelihood this will keep rates low. Much of last year’s equities rally was driven by ultra-low rates that pushed money into stocks.
“The desire to have interest rates stay low is because the outlook is still problematic at best,” said Jim Grefenstette, senior portfolio manager of the Federated Mid-Cap Growth Strategies Fund in Pittsburgh, Pennsylvania.