Bernanke discourages investors by Zuzana Zelenakova

Federal Reserve Chairman Ben Bernanke stated on Monday that the current U.S. economy tendency will probably persist until later in the year. His comments have had rather significant impact on stock markets. Wall Street closed lower on Thursday. The Dow Jones industrial fell 1,40 percent, the Standard and Poor's 500 index declined by 1,34 percent and Nasdaq 1,74 percent. After several strong days on Wall Street and quite satisfying retail sales report it was not something investors were pleased to hear. Bernanke suggested that further interest rates cuts are possible. "He was more bearish on the economy than he was before," said Arthur Hogan, Jefferies & Co. market analyst. "To have the Fed come in and talk about how things could be getting worse, not better, kind of takes wind out of their sails." He was also concerned about the situation on the job market, because if the number of unemployed will soar it will inevitably affect the consumer spending and thus subsequently also economic growth. However, the Labor Department reported that the number of unemployed fell by 9,000 last week. On the other hand, the government reported that the nation's trade deficit declined by 6.9 percent to $58.8 billion and it is due to U.S. export increases. The U.S. good are cheaper now for foreign buyers, because the dollar is weak and it actually helps to prompt the economy like this. Unfortunately, higher oil prices prevent the trade deficit from narrowing further. On Thursday light, sweet crude oil rose from $2.19 to $95.46 per barrel.

related story: http://news.yahoo.com/s/ap/20080214/ap_on_bi_st_ma_re/wall_street;_ylt=AhjBVSy_MxgV_tHGk0yf4C2s0NUE

by Zuzana Zelenakova for PocketNews (http://pocketnews.tv)

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