The S&P 500 rose slightly in early trading amid signs over the weekend that Fed Chairman Ben Bernanke will be confirmed for a second term.
The S&P was up 9.93 points or nearly 1 percent, recovering from a three day slide last week that culminated in a 2.21 percent drop on Friday.
Big banks are among the biggest gainers. Goldman Sachs (NYSE:GS) is up 1.93 percent, Morgan Stanley (NYSE:MS) up 2.45 percent, and Bank of American (NYSE:BAC) up 1.61 percent.
According to the Associated Press, President Obama called key members of the Senate on Saturday and was reassured that Bernanke will have enough votes for confirmation to a second term.
On “Meet the Press” on Sunday, White House Senior Advisor Valerie Jarret said she is “confident that the chairman will be confirmed” and Senate Republican Leader Mitch McConnell said he “thinks [Bernanke] will be confirmed,” although he refused to answer whether he will personally vote for or against the confirmation.
“He’s going to have bipartisan support,” said McConnell, easing fears that dissenting Democrats will cost Bernanke his second term.
News broke last Friday that two additional Democrat Senators opposed Bernanke’s nomination to a second term. Senator Barabara Boxer of California and Senator Russel Feingold of Wisconsin held Bernanke partially responsible for causing financial crisis and wanted a “clean break from the failed policies of the past”.
“It is time for Main Street to have a champion at the Fed,” said Boxer, echoing populist sentiment that the actions of the Federal Reserve during the financial crisis have benefited big banks more than the average citizen.
Bernanke was first nominated for the position by President George W. Bush in 2005. Under his watch, the S&P 500 recovered by more than 400 points from its low in March 2009 and third quarter GDP increased at an annual rate of 2.2 percent, up from a second quarter decrease of 0.7 percent.
U.S. unemployment has risen to 10 percent during his time as Fed chief. Last Friday, state-by-state unemployment data showed that 43 states had their unemployment rate increase from November to December.