The recent stock market rally continues on Wednesday as Fed Chairman Bernanke reiterates his promise to keep the fed funds rate low. 

The U.S. stock market is also buoyed by a better than expected euro zone new industrial orders report and shook off a disappointing housing data.

The S&P 500 Index is up 0.82 percent, or 8.95 points, to trade at 1,103.55 at 12:38 pm.  The Dow Jones Industrial Average is up 0.81 percent, or 84.14 points, to trade at 10,365.55.  The Nasdaq Composite fared the best, gaining 1.02 percent.

Bank of America (NYSE:BAC), up 1.94 percent, and JPMorgan (NYSE:JPM), up 1.96 percent, are among the leaders of the Dow.

Intel (NASDAQ:INTC), another component of the Dow, is up 1.53 percent and Research In Motion (NASDAQ:RIMM) is up 2.79 percent.

Homebuilder D.R. Horton (NYSE:DHI) is down 1.91 percent and Pulte Homes (NYSE:PHM) is down 1.09 percent as their shares are weighed by the disappointing housing data.   

As widely expected, Fed Chairman Ben Bernanke stated in his testimony Wednesday that the fed funds rate warrant exceptionally low levels for an extended period because of the low rates of resource utilization, subdued inflation trends, and stable inflation expectations.

Bernanke stated the financial markets continue to improve, with conditions in short-term funding markets retuning to near pre-crisis levels.  However, Bernanke sees continued weakness in bank lending.

Futures contracts indicate that fed tightening will begin the third quarter of 2010, which is at a slower pace than what market participants had expected last summer, said Scott Redler, Chief Strategic Officer of T3Live.

Redler partially attributes the downward revision to Bernanke's repeated statements that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. 

This is good for stocks and bank shares are rallying, said Redler, who recommend traders last Friday to buy the dip.

Yesterday's [drop] was buyable, said Redler, and the market should make new highs this year. 

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