NEW YORK CITY — Stocks recovered from an early dip Wednesday, as investors tried to shake off Fed chairman Bernanke's cautious economic sentiments in testimony before Congress, focusing instead on continuing Tuesday's strong buying of financials. After a strong day on Wall Street Tuesday with the blue-chip Dow gaining nearly 400 points, stocks slipped out of the gate Wednesday. Investors were worried about negative economic sentiments in testimony before a hearing of the Joint Economic Committee of Congress by Chairman of the Federal Reserve Ben Bernanke. The Dow upswing Tuesday was the largest single gain for the beginning of the second quarter in the history of the stock market, the media reports.
Bernanke said he believed the economy is still "slightly growing at the moment," though a U.S. economic recession is possible. He said he expects a continued rise in unemployment, and he noted that the economic outlook has worsened since the Fed's last forecast was released in January. But about an hour after the 9:30 a.m. ET hearing began, investors focused instead on an encouraging employment report and shifted their attention to continuing Tuesday's positive outlook for the financial sector.
"The whole mood has changed on Wall Street Tuesday," said Clark Capital Management Group founder and CEO Harry Clark, who believes that investors are starting to believe that the worst of the recent economic slowdown is over.
"Bernanke always initially moves the markets, but he's not saying anything new today. And the guy has done a good job recently by getting liquidity back," he added.