A rally as new term for Fed chief seen

NEW YORK - Major stock indexes rose yesterday as momentum shifted in favor of the reappointment of Federal Reserve Chairman Ben Bernanke.

Investors want a sign that Bernanke will remain in control of the Fed. If he is confirmed, a big shift in interest-rate policy would be less likely.

Key senators including Max Baucus of Montana and Dianne Feinstein of California said yesterday they would support Bernanke's confirmation, and presidential adviser David Axelrod said Bernanke has enough votes to be confirmed. Last week, several senators expressed doubt about Bernanke's reappointment, which had seemed assured, contributing to a sharp drop in the market.

The Dow Jones industrial average rose nearly 24 points after losing 552 points over the previous three days.

Bernanke's term expires on Sunday, and the Senate is expected to vote on his reappointment this week.

Technology shares could get a boost today from Apple Inc., which said after the closing bell that its profit jumped nearly 50 percent for the final three months of 2009 as it sold more iPhone devices.

The Dow rose 23.88, or 0.2 percent, to 10,196.86.

The Standard & Poor's 500 index rose 5.02, or 0.5 percent, to 1,096.78, while the Nasdaq composite index rose 5.51, or 0.3 percent, to 2,210.80.

The questions about Bernanke's reappointment came as Fed policymakers are set to gather for the first meeting of the year on interest-rate policy. The two-day meeting starts today. The Fed is expected to hold rates at record lows, so investors will examine the accompanying statement from the Fed for clues about when the central bank might begin to raise rates.

Investors will get a rush of earnings and economic reports during the week to help determine how the economy is faring.

Most earnings have topped analysts' expectations, but unlike in recent quarters, that has not helped send stocks higher. Traders are paying more attention to specifics within earnings reports, such as revenue growth, and forecasts rather than seizing on a better-than-expected profit as a reason to buy shares.

Dozens of companies will report earnings throughout the week, including Amazon Inc., AT&T Inc., and Johnson & Johnson. Apple rose $5.32, or 2.7 percent, to 203.07. The stock was showing little direction in after-hours electronic trading.

Alan Lancz, money manager at Alan B. Lancz & Associates in Toledo, Ohio, said questions about Bernanke's future and concerns about increased regulation of banks added to a list of uncertainties investors are already facing.

Financial stocks have led the market's 10-month advance, so a shift in what they're worth could destabilize the market, he said.

"You really don't know what you're buying when you buy a Goldman Sachs now," Lancz said, referring to one of the big banks that could face a shift in government rules.

In other trading, the dollar was mixed against other major currencies, while gold rose.

The Russell 2000 index of smaller companies rose 0.99, or 0.2 percent, to 618.11.

Britain's FTSE 100 fell 0.8 percent, Germany's DAX index fell 1.1 percent and France's CAC-40 lost 1 percent. Japan's Nikkei stock average fell 0.7 percent.