Global stocks rose Thursday after China unexpectedly cut its interest rate but dipped slightly after Federal Reserve Chairman Ben Bernanke declined to commit to more economic intervention to boost the U.S. economy.
The Chinese government said it would lower interest rates by 25 basis points, the first decrease since October 2008, as its economic growth has cooled.
A market that needs constant life-support from government intervention is receiving it, wrote Dave Rosenberg, chief economist of Gluskin Sheff, in a research note Thursday.
Germany's DAX was up 50.23 points, or 0.82 percent, to 6,144.22 points. Japan's Nikkei closed up 106.19 points, or 1.24 percent, to 8,639.72.
The Dow Jones Industrial Average rose 102.55 points, or 0.83 percent, to 12,517.34 points in Thursday afternoon trading. The S&P 500 was up 7.30 points, or 0.56 percent, to 1,322.43 points. The Nasdaq increased 4.40 points, or 0.15 percent, to 2,849.14 points.
U.S. stocks dipped slightly from morning gains of around 1 percent after Bernanke told Congress that the Fed would wait to see if additional stimulus was needed. Although he conceded that the risks of a euro zone crisis have risen pretty significantly in the last month or two, Bernanke still expects the U.S. economy to grow moderately this year.
As always, the Federal Reserve remains prepared to take action as needed to protect the U.S. financial system and economy in the event that financial stresses escalate, he said.
The noncommittal came a day after San Francisco Fed President Janet Yellen said in a speech at the Boston Economic Club that the Fed was prepared to intervene but stopped short of support it. I am convinced that scope remains for the Federal Open Market Committee to provide further policy accommodation either through its forward guidance or through additional balance-sheet actions, she said.