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Federal Reserve Chairman Ben Bernanke will be on Capitol Hill Thursday morning, giving his views of a possible government stimulus package. Sen. Charles Schumer, D.-N.Y., has said the chairman in general supports a plan.
The markets also widely expect the Fed to lower its Fed funds target from its current 4.25 percent level this month. The central bank's monetary policy committee will meet Jan. 29-30 and Bernanke already has sent strong signals the bank is disposed to reducing rates for a fourth straight time. Many investors expect a sizable reduction of at least 0.50 percentage points.
The futures contract for the Dow Jones industrial average rose 44 points to 12,534.
S&P 500 futures gained 6.10 points to 1,382.20 as the Nasdaq 100 contract advanced 12.5 points to 1,893.5.
Treasurys generally were slightly higher in early trade, as oil futures also moved ahead and the dollar made a bit of headway against the euro.
The earnings season continues in full force with a report from Merrill Lynch & Co. Inc. The company is expected to announce a sizable writedown for assets backed by poor-quality mortgages. However, investors may take the losses in stride after Merrill earlier this week secured a new round of capital infusions from foreign sources.
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 Bank of New York Mellon Thursday said it would take a $180 million charge for losses linked to complicated assets that have subprime exposure. That loss is relatively mild compared to the multi-billion dollar subprime losses of some of its banking peers. The bank also managed a profit, although it was well below year-earlier levels.
Earnings from other financial institutions this week have made clear that there is also increasing weakness in home equity and other consumer-oriented banking operations. The problems with subprime and home equity, along with a badly stalled housing market, are among the chief reasons investors are pinning their hopes on stimulus efforts and cheaper rates.
In overseas trade, Tokyo's Nikkei stock index closed 2.07 percent higher. In Europe, London's FTSE 100 rose 0.28 percent, Frankfurt's DAX gained 0.38 percent and Paris' CAC advanced 0.37 percent.
[Associated Press; By LESLIE WINES]
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