27 Jun 2009

Wall St share prices rally

11:00 am on 27 June 2009

US stocks rallied on Thursday as investors were relieved that the chairman of the US Federal Reserve Ben Bernanke withstood a barrage of questions from Congress on the Bank of America-Merrill Lynch deal.

The US House of Representatives Oversight and Government Reform Committee questioned Mr Bernanke on the Fed's role in Bank of America's takeover of Merrill Lynch, and whether he pressured Bank of America's chief executive to go through with the deal.

Mr Bernanke denied accusations the Fed threatened Bank of America executives if they halted a merger with Merrill Lynch or pressured them to withhold bad news about the troubled investment bank.

Retailers and home builders led stocks higher for much of the session, helped by a surprising profit increase from retailer Bed Bath & Beyond Inc.

Energy companies' shares also rose as oil prices climbed above $US70 a barrel.

The Dow Jones industrial average jumped 172.54 points, or 2.08%, to 8,472.40, snapping a four-day losing streak.

The Standard & Poor's 500 Index gained 19.32 points, or 2.14%, to 920.26.

The Nasdaq Composite Index advanced 37.20 points, or 2.08%, to 1,829.54.