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Fed Governor Bernanke comments gives lift to indexes

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The major indexes have rebounded to their best levels of the afternoon with the tech-heavy NASDAQ-100 Index (NDX.X) 1,113.80 +0.07% now showing a fractional gain of 1 point, but the first green we've seen from a major index, while the S&P 500 Index (SPX.X) 916.43 -0.28% is off just 2.5 points and reclaims its WEEKLY R2 level of 904 after Federal Reserve Governor Ben Bernanke said the economy's biggest problem right now is a pessimistic outlook from business and that high productivity rates, lower oil prices and reduced geopolitical uncertainty along with a stimulative monetary and fiscal policy should lift business spending, providing seasonal growth, which should lift final demand by the end of 2003.

Bernanke, who has been a "rising star" within the Fed said he felt the lack of corporate spending was due to "pessimism" among corporate executives, but that the root of the pessimism has been the rise in energy prices along with geopolitical concerns that now look to be cooling off.

While Bernanke's comments gave a lift to equities, Treasuries found selling from their session high in their final minutes of trade with the 10-year June futures contract (ty03m) $114'190 +0.54% easing back to finish its trade with a 20/32 gain and YIELD ($TNX.X) finishing out at 3.905% after a session low YIELD trade of 3.878%.

The NASDAQ-100 Index (NDX.X) 1,118.80 fractional gain is largely being attributed to the Biotechnology Index (BTK.X) 365.28 +1.97% pushing to a session high. In this afternoon's market monitor we've notes some sudden moves higher in non-BTK.X component Geron Corp. (NASDAQ:GERN) $4.72 +8.5%, when in a matter of seconds, the stock gapped "wildly" from $4.30 to $4.60 on light volume and no news that I can find. Then, minutes later, similar stock symbol and BTK.X component Genzyme (NASDAQ:GENZ) $38.81 +6.78% jumped from $37 to $39 on news that the FDA approved the biotech company's new treatment for Fabry disease. In January, the FDA review panel had recommended the drug for final approval.

Market internals remain near their 01:00 PM EST mark, with NYSE volume building to just over 1.2 billion shares, with decliners edge over advancers narrowing by an 8 to 7 margin. 108 stocks on the big board have now traded 52-week highs in today's session compared to 19 stocks having traded a new 52-week low.

NASDAQ volume is brisk at just over 1.2 billion shares with decliners narrowly outnumber advancers by a similar 8 to 7 margin. NASDAQ reports 130 stocks trading new 52-week highs in today's trade, compared to 23 stocks having traded new lows.

Jeff Bailey

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