World Business

Wall Street dives after Bernanke's testimony

Updated: 2010-07-22 10:49
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NEW YORK - Wall Street dived on Wednesday after Fed chairman Ben Bernanke told a congressional committee that the US economy is "unusually uncertain."

In the semiannual report to Congress, the Fed is still expecting the economy to expand this year, but lowered its forecast for growth.

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Bernanke said the economy is fragile, but he did not forecast that it would fall back into recession.

US labor market has shown modest improvement in the first half of 2010, but the pace of hiring to date has not been sufficient to bring about a significant reduction in the unemployment rate, the Fed said, emphasizing that the rise in payrolls is still sluggish, leaving jobless rate unacceptably high.

Shares of Apple rose 0.93 percent as the company easily surpassed Wall Street anticipation by reporting a best-ever quarter.

In the April-to-June period, Apple's sales soared to a record $15.7 billion, 61 percent higher from the same period last year. Meanwhile, its net income rose to $3.25 billion, up 78 percent year-on-year.

Most of the technology shares fell, except for apple which rose sharply after the report, as Yahoo disappointed investors on revenue front. Shares of Yahoo fell more than 8 percent after the company said its second-quarter profit rose 51 percent to $213 million on cutting costs, but its revenue grew only 2 percent to $1.6 billion, suggesting Yahoo could be losing more market share to rival Google Inc.

The Dow Jones industrial average was down 109.43 points, or 1. 07 percent, to 10,120.53. The Standard & Poor's 500 index fell 13. 89 points, or 1.28 percent, to 1,069.59 and the Nasdaq was down 35. 16 points, or 1.58 percent, to 2,187.33.

A drive for safe assets drove the dollar and yen higher Wednesday after Bernanke's speech. In late trading in New York, the euro slid to $1.2745 from $1.2895 late Tuesday.

Oil prices retreated Wednesday after the US said crude supplies grew despite more demand for most types of fuel.

Comments from Bernanke about the fragile economy also pushed prices down.

Light, sweet crude for September delivery fell $1.02 to settle at $76.56 a barrel on the New York Mercantile Exchange.

In London, Brent crude fell 85 cents to settle at $75.37 per barrel on the ICE futures exchange.