Europe and U.S. stock indices edged up cautiously ahead of Fed Chairman Bernanke's semi-annual testimony on monetary policy and the state of the economy at 10:00 am EST. 

The S&P 500 Index is up 4.91 points, or 0.45 percent, at 1,099.51 at 9:35 am.  The Dow Jones Industrial Average is up 44.22 points, or 0.43 percent, at 10,326.63. 

Asian markets closed mostly down.  European markets tracked the losses early in their session but were lifted by a better than expected industrial order report released at 5:00 am EST.  U.K. and German indices have edged up to trade positive for the day.

Similarly, the dollar, which in recent times has been inversely correlated with the U.S. stock market, slid against the euro at 5:00 am EST.  Since then, it has been trading range-bound ahead of Bernanke's testimony.

The Fed Chairman is widely expected to reiterate his position of keeping the Fed fund rate at the current level for an extended period of time.

He is also expected to reiterate that although the economy shows signs of improving, unemployment remains a challenge and inflationary pressures are subdued.

Although market participants may not be able to glean when the Fed funds rate will be raised, they will carefully analyze Bernanke's comments about other aspects of the liquidity withdraw.

For example, Bernanke signaled that the Fed will increase the discount rate before long on February 10.  On February 18, the discount rate was raised by 0.25 percent.

New home sales and Treasury Secretary Geithner's testimony are both scheduled for 10:00 am, although they will likely be overshadowed by Bernanke.  

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