Business

U.S. stocks higher as bailout hearing opens

NEW YORK: U.S. financial markets appeared somewhat steadier early Tuesday, with stocks trading moderately higher as top economic officials prepared to update Congress about efforts to hammer out a $700-billion financial rescue plan.

Oil and gold prices retreated after shooting higher on Monday as investors went in search of hard assets, and demand eased a bit for 3-month Treasury bills, considered the safest short-term financial asset.

The dollar, hit hard on Monday, regained ground.

After days of intense gyrations in financial markets, investors are anxious over whether the plan to absorb billions of dollars in banks’ bad mortgages and other risky assets will help steer the sputtering economy back onto sound footing or if it will lead to more turmoil by dramatically ramping up inflation.

Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke and Securities and Exchange Commission Chairman Christopher Cox are testifying before lawmakers, who are working with the Bush administration to iron out the details of the bailout.

In remarks prepared for his appearance before the Senate Banking Committee, Mr. Bernanke urged Congress to quickly pass the financial bailout and warned “the implications for the broader economy could be quite adverse” if current economic turmoil persists.

The comments came as President George W. Bush sought to assure world leaders at the United Nations that the U.S. government has the economic problems under control, calling the bailout package “a robust plan to deal with serious problems.” He said there were ideas about how to change the package but that there was a desire in Washington to get it approved quickly.

The rescue plan is the latest in a string of extraordinary steps to prop up the U.S. economic system. — AP

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