US stocks pare gains after Bernanke talk

NEW YORK: US stock markets gave up all their gains Tuesday after Federal Reserve chairman Ben Bernanke confirmed a gloomy picture of economic growth just 15 minutes before the closing bell.

A buoyant day turned into the fifth straight losing session after Bernanke told an audience that the weak housing sector was holding back the recovery and that job creation was in a "far from normal" slump.

The Dow Jones Industrial Average closed down 19.15 points (0.16 percent) at 12,070.81, after trading as much as 88 points higher during the day.

The broad-based S&P 500 lost 1.23 (0.10 percent) to 1,284.94, while the tech-heavy Nasdaq Composite fell 1.00 (0.04 percent) to 2,701.56.

Among the Dow's 30 blue chips, Cisco lost 3.0 percent, and Bank of America slid 1.75 percent.

Apple gave up another 1.8 percent after Monday's loss, which came despite the launch of its ambitious new cross-platform iCloud online digital storage service.

Bernanke was not very upbeat in his speech to an audience in Atlanta, Georgia, offering cautious answers on how to rev up the faltering economy.

In his first public comments on the economy in nearly a month, he gave no hints that the Fed was ready to extend the $600 billion monetary stimulus program due to end this month.

Instead, he said, "accomodative monetary policies are still needed," apparently a reference to keeping interest rates at the current record-low level.

Corrugated packaging maker Temple-Inland jumped 40.4 percent after International Paper's $3.3 billion hostile offer for the company, which the board rejected Monday as grossly undervaluing it.

Temple's price closed at $29.49, slightly below IP's $30.60 per share offer.

Bond prices fell marginally. The yield on the 10-year Treasury note climbed to 3.01 percent from 3.00 percent on Monday. The 30-year bond increased to 4.27 percent from 4.26 percent.

Bond prices and yields move in opposite directions.

Copyright AFP (Agence France-Presse), 2011