Wall Street helped by Bernanke testimony

Testimony by Federal Reserve Chairman Ben Bernanke on Thursday that the Fed will recover most or all of the $29 billion it loaned to stave off the collapse of Bear Stearns (NYSE: BSC) sent Wall Street higher in early afternoon trade. The gains came after early declines in reaction to a Labor Department report showing that first-time jobless claims in the US last week were up to levels not seen since the days immediately after Hurricane Katrina in 2005. The Dow Jones Industrial Average was up 0.42 percent to 12,659.41 while the Nasdaq Composite had added 0.46 percent to 2,372.29 and the S&P 500 was 0.48 percent higher to 1,374.04. Airlines were mixed after a second bankruptcy in the sector in a week as well as on an announcement from the Federal Aviation Administration that four airlines are being investigated over lapses in airplane maintenance. Newspaper publishers were also mixed on an analyst report that earnings in the sector will be down in the first quarter on faltering ad sales, while departments stores were lower on predictions that there are more profit warnings to come in the sector.

Tokyo’s equities markets saw gains, joining most Asia-Pacific region markets in advancing. As in the rest of the region, commodities-related shares led the gains after price increases for oil, metals, and grains on Wednesday. The Nikkei 225 was up 1.52 percent to 13,389.9 while the Topix index was 1.37 percent higher to 1,299.64 and the Mothers market added 0.04 percent to 623.49. The oil and coal sectors were higher, and traders advanced. On the other hand, the automobile manufacturing sector declined after a broker downgrade of the entire Japanese sector.

Elsewhere in the region, the Sensex was up 0.52 percent to 15,823.55. The Kospi index was 1.23 percent higher to 1,763.63 while the Straits Times Index added 1.5 percent to 3,171.55 and the Hang Seng was up 1.64 percent to 24,264.63. In Australia, the Sydney Ordinaries gained 1.82 percent to 5,645.8 while the S&P/ASX200 was 1.93 percent higher to 5.608.9. The Shanghai Composite added 2.94 percent to 3,446.24. The main exception to the gains was Taiwan’s Taiex, which dropped 0.1 percent to 8,596.34.

Europe’s markets saw declines as shares in banks dropped after analysts cut earnings estimates and brokers issued downgrades in the sector and after a German bank announced nearly $7 billion in writedowns related to exposure to the subprime market. The FTSE Eurofirst 300 was down 0.44 percent to 1,312.1. The Dax was 0.53 percent lower to 6,741.72 in Frankfurt while the Paris CAC-40 fell 0.49 percent to 4,887.87 and Madrid’s IBEX dropped 0.72 percent to 13.738.90. Besides the declines for banks, the semiconductors sector was also lower, as were insurers and the retail sector. Drinks makers, the oil sector, airlines and construction groups saw gains, while utilities and the automobile sector were mixed on the session.

In London, the FTSE 100 fell 0.42 percent to 5,891.3 while the FTSE 250 dropped 1.88 percent to 10,177.2. Utilities were higher on broker upgrades in the sector. Miners and the retail sector were mixed. Real estate developers fell on downgrades in the sector, while house builders and construction groups also saw declines. The banking sector and insurers were down as well.

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