Bernanke said he "stands ready to take substantive additional action" to help the economy, implying the Fed would cut interest rates. Stocks briefly rallied on that, then fell back.
What really got stocks going was talk that there might finally be signs of a bottom. There was talk of consolidation in the beaten up mortgage industry on word from the Wall Street Journal that Bank of America was in talks to buyCountrywide , and some airlines were up more than 20 percent on word that the Delta may finally be getting serious about merger talks withNorthwest and UAL.
Another positive data point: retailers clearly disappointed with reports of poor retail sales in December, but most of them were flat or even up despite the bad news. Beaten-up sectors that don't go down on bad news is another sign of a potential bottom.
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