We are seeing a modest rally, led by financials. Lehman, for example, has gone from $12 at its bottom shortly after 10 am ET to just about $14, up 11 percent, though most other financials remain in negative territory. Fannieand Freddie remain down over 20 percent, but off the lows of the day.
The recent weakness in oil is causing energy stocks to drop; GM however has rallied as oil has declined.
Mr. Bernanke is making important points on how to find a way out of the current problems. He made it clear that stabilizaiton of new home construction in late 2008 or 2009 is the critical issue, though he made it clear that house prices may continue to fall because of the large inventory of unsold homes. He also made it clear that strengthening the GSEs is of vital importance.
When questioned on the global economy, Mr. Bernanke said he expects "some moderation, but still healthy growth." This might weaken the contribution of exports, but it might also reduce commodity prices, which would be a positive.
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