Stocks Closed Higher on Bernanke Comments

U.S. stocks closed higher on Wednesday, boosted by comments from Federal Reserve Chairman Ben Bernanke that the central bank was considering another round of special stimulus to the economy if conditions deteriorated. But much of the early enthusiasm for the prospects of more cheap money evaporated by the close. The Dow Jones Industrial Average closed up 44.73 points, or 0.36%, to 12,491.61. The S&P 500 gained 4.08 points, or 0.31%, to 1,317.72. The Nasdaq Composite added 15.01 points, or 0.54%, to 2,796.92.

Federal Reserve Chairman Ben Bernanke said Wednesday that the central bank is prepared to provide additional stimulus if the economic lull persists.

The Federal Reserve Chairman has issued a stern warning to Congress repeatedly this year: if it fails to raise the U.S. debt ceiling by Aug. 2, the economic fallout could be “catastrophic,” “self defeating” and “dire.” And yet, here we are in mid-July, with the country only three weeks away from a possible default, and Bernanke is repeating his warning again — this time in his semi-annual monetary policy report to Congress.

The federal budget deficit is on pace to break the $1 trillion mark for the third straight year, ratcheting up the pressure on the White House and Congress to reach a deal to rein in spending. The deficit totaled $971 billion for the first nine months of the budget year, the Treasury Department said Wednesday.

An unexpected drop in U.S. crude supplies boosted oil prices Wednesday, and more government stimulus spending could help push oil even higher this year. Benchmark West Texas Intermediate crude for August delivery rose 62 cents to settle at $98.05 per barrel on the New York Mercantile Exchange.

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