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New York - US stocks extended losses on Friday, with major indexes falling more than 1 percent after Federal Reserve Chairman Ben Bernanke said the US economic recovery was much less robust than hoped but stopped short of signalling further action to boost growth.
The Dow Jones industrial average dropped 1.62%, Standard & Poor’s 500 Index slid 1.72% and the Nasdaq Composite Index declined 1.10%.
Bernanke said it was critical for the economy’s health to reduce long-term joblessness.
“It is clear the recovery from the crisis has been much less robust than we had hoped,” he said in remarks prepared for delivery to an annual Fed retreat.
Bernanke said the Fed will meet for two days in September instead of the planned one to mull its options to provide additional monetary stimulus, among other topics.
The Fed chairman said reducing the record high level of workers who have been unemployed for six months or more would help achieve stronger US economic growth.
“Under these unusual circumstances, policies that promote a stronger recovery in the near term may serve longer-term objectives as well,” he said.
The dollar rose 2% against the Swiss fran,c scaling levels not seen since late July
Stimulus hopes
Hopes for new stimulus had contributed to a three-day rally earlier this week, though equities later sold off as expectations moderated.
The Dow Jones industrial average dropped 1.62%, Standard & Poor’s 500 Index slid 1.72% and the Nasdaq Composite Index declined 1.10%.
Bernanke said it was critical for the economy’s health to reduce long-term joblessness.
“It is clear the recovery from the crisis has been much less robust than we had hoped,” he said in remarks prepared for delivery to an annual Fed retreat.
Bernanke said the Fed will meet for two days in September instead of the planned one to mull its options to provide additional monetary stimulus, among other topics.
The Fed chairman said reducing the record high level of workers who have been unemployed for six months or more would help achieve stronger US economic growth.
“Under these unusual circumstances, policies that promote a stronger recovery in the near term may serve longer-term objectives as well,” he said.
The dollar rose 2% against the Swiss fran,c scaling levels not seen since late July
Stimulus hopes
Hopes for new stimulus had contributed to a three-day rally earlier this week, though equities later sold off as expectations moderated.
“At this stage, there’s no help from Mr. Bernanke. The early read
was nothing of any import or anything dramatic. The market is taking it as a
negative,” said Roger Volz, director of cash equities at BGC Financial in New
York.
“If we hold below 1 141 (on the S&P) at the close, I’m looking
for us to retest recent lows around 1 127,” he said.
Technology stocks helped put the Nasdaq into positive territory,
with Micron Technology up 1.9% to $5.48, and Research in Motion
adding 2.6% to $29.98.
Bank of America Corp was off 2% to $7.50, the top drag on the
Dow.
