U.S. markets hover, sobered by Bernanke

U.S. stock indexes hovered Tuesday, sobered by word from Federal Reserve Chairman Ben Bernanke the economy is too weak to tighten monetary policy.

In light of the substantial economic slack and limited inflation pressures, monetary policy remains focused on fostering economic recovery, Bernanke said to the House Financial Services Committee.

However, we also believe that it is important to assure the public and the markets that the extraordinary policy measures we have taken in response to the financial crisis and the recession can be withdrawn in a smooth and timely manner as needed, thereby avoiding the risk that policy stimulus could lead to a future rise in inflation, he said.

The Dow Jones industrial average climbed 51.01 points, or 0.58 percent, to 8,899.17 in midmorning trading. The broader Standard & Poor’s 500 Index rose 0.48 points, or 0.05 percent, to 951.61. The technology-heavy Nasdaq lost 6.17 points, or 0.32 percent, to 1,903.12.

In Asia, Japan’s Nikkei 225 added 256.70 points, or 2.73 percent, to close at 9,652.02 after a long holiday weekend. China’s Shanghai Composite Index closed down 53.71 points, or 1.64 percent, at 3,213.21. Hong Kong’s Hang Seng Index finished essentially flat, down 0.64, or zero percent, at 19,501.73

The 10-year U.S. Treasury note rose 13/32, yielding 3.564 percent, while the 30-year bond was up 20/32, yielding 4.478 percent.

The U.S. dollar fell to 93.87 yen from 94.29 yen in New York late Monday. The euro, in U.S. dollars, rose to $1.4232 from $1.4228.