The European debt crisis is likely to have only a “modest” impact on the U.S. economic recovery as long as Wall Street stabilizes, Federal Reserve Chairman Ben Bernanke told Congress on today. Testifying before the House Budget Committee, Bernanke struck a more confident tone that the recovery will remain intact despite problems in Europe as well stubbornly high unemployment and a fragile housing market at home.
Stocks climb as Bernanke says recovery continues:The Dow Jones industrials climbed back above 10,000 today after Bernanke said debt problems in Europe might only amount to a “modest” drag on the U.S. economy if the financial markets can halt their slide. The Dow rose about 95 points in early afternoon trading, bringing its two-day advance to about 220. All the major indexes tacked on about 1 percent.
Dividend worries weigh on BP shares: Shares in BP fell further today amid fears the British oil company will bow to U.S. political pressure to cut dividends to help pay for the Gulf of Mexico oil spill disaster. BP stock hit an almost two-year low, closing down 4.2 percent at $5.71 on the London Stock Exchange, as investors fretted over the prospect of the first cut in shareholder payments since 1992.
Ex-Florida lawyer gets 50 years for Ponzi scheme: Disbarred attorney Scott Rothstein, whose seemingly unlimited wealth bought palatial homes, exotic cars and mega-yachts, was sentenced today to 50 years in prison for operating a $1.2 billion Ponzi scheme using faked legal settlements. The sentence was below the 100-year maximum Rothstein faced for five felony convictions, including racketeering conspiracy, money laundering conspiracy and wire fraud. Rothstein, 48, had hoped for a 30-year sentence.
Overall mortgage application volume falls 12.2 percent: The number of customers applying for a mortgage to purchase a property fell to the lowest level in 13 years last week, a sign the housing market is struggling without government incentives. Purchase volume declined 5.7 percent and is at its lowest point since February 1997, the Mortgage Bankers Association said today. Overall mortgage application volume, which includes loans for purchases and refinancings, dropped by 12.2 percent during the week ending June 4, compared with the previous week. Refinance volume tumbled 14.3 percent.
Wholesale inventories and sales both up in April: Inventories held by wholesalers rose for a fourth straight month in April while sales rose for a 13th consecutive time. Both gains were encouraging signs for a sustained economic recovery. Wholesale inventories increased 0.4 percent last month after a 0.7 percent gain in March, the Commerce Department said today.