Market Reacts to Fed Chairman’s Speak, Bush’s Plan
After Fed Chairman Bernanke's remarks on Friday, stocks rose while Treasury securities remained lower. The Standard & Poor's 500 index rose 0.8 percent to 1,469.23 at 10:09 a.m. in New York, after advancing as much as 1.3 percent earlier. The yield on the benchmark 10-year note was at 4.55 percent.
Countrywide Financial Corp., the nation's largest mortgage lender, and Lehman Brothers Holdings Inc., the biggest underwriter of bonds backed by home loans, advanced. Fifteen of 16 homebuilders in Standard & Poor's indexes gained.
Homebuilders also rallied on Bush's plan. Hovnanian Enterprises Inc., New Jersey's largest homebuilder, gained 29 cents to $11.59. Lennar Corp., the biggest U.S. builder, increased 44 cents to $27.96. D.R. Horton Inc., the number 2 builder, climbed 23 cents to $14.79.
Bernanke' speech came on the heels as of the President's measures to alleviate the crisis among homeowners unable to pay their loans.
“It is not the responsibility of the Federal Reserve --nor would it be appropriate -- to protect lenders and investors from the consequences of their financial decisions,'' Bernanke said. “But the developments in financial markets can have broad economic effects felt by many outside the markets, and the Federal Reserve must take those effects into account when determining policy.''
Published on August 31, 2007
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