NEW YORK Wall Street turned higher Thursday as investors looked past reports showing a slowing economy and focused on the possibility that the worst is over for the financial sector.
Federal Reserve Chairman Ben Bernanke said Thursday in testimony to Congress the Fed expects to recover most, if not all, the $29 billion worth of loans it made to keep the struggling Bear Stearns Cos. from collapse. The Fed chief's remarks were calming to investors hoping that the credit markets are improving.
Even in the face of poor economic data, the stock market has been performing well. Early in the day, stocks dipped after the Labor Department reported a spike in jobless claims to a level not seen since September 2005. But the initial losses were very mild, particularly given the huge advance Wall Street logged Tuesday and has mostly maintained.
"I think that the desire to sell is coming off," said Thomas J. Lee, equities analyst at JPMorgan. The fact that the market has not been shaken by recent disappointing economic data "tells me that the recession is largely discounted."
In addition to Bernanke's testimony, investors had gotten a bit of relief from the Institute for Supply Management. The ISM said Thursday the services sector contracted only slightly in March a stronger performance than in February, and a better reading than many economists predicted.
By early afternoon, the Dow Jones industrial average was up 33.71, or 0.27 percent, at 12,639.54. The Dow, which shot up nearly 400 points on Tuesday, is up more than 7 percent since March 10, when it hit its lowest point since October 2006.Broader stock indicators also recovered from earlier dips. The Standard & Poor's 500 index rose 3.70, or 0.27 percent, to 1,371.23, and the Nasdaq composite index rose 4.89, or 0.21 percent, to 2,366.29.