Bush: Americans' Economic Attitudes Shifting

The Dow Jones industrial average rallied through the afternoon, rising 4.7 percent, or more than 413 points, to close over 9,000. The broader Standard & Poor's 500 rose 4.8 percent and the tech-heavy Nasdaq showed a gain of 3.4 percent.

The gains in U.S. markets followed a rebound overseas where government efforts to stabilize the banking sector continue. ING, the Dutch insurance and banking giant, surged 15 percent in morning trading after reports it would receive a $13 billion cash injection from its government. It closed up 21.7 percent. News reports also suggested that the International Monetary Fund is planning a $6 billion bailout of Iceland.

London's FTSE closed up 5.4, the Paris CAC rose 3.6 while the Dax in Germany gained 1 percent. Japan's Nikkei was up 3.6 percent.

U.S. governments efforts to stem the financial crisis have focused on unfreezing the credit markets and encouraging banks to lend to one another, other businesses and consumers. Those markets appear to be making small steps toward loosening.

The rate at which banks lend to one another -- the London interbank offered rate, or Libor -- eased slightly today, down to 4 percent from 4.4 percent on a three-month loan. But it is still much higher than the 1.5 percent bank lending rate set by the Federal Reserve. In normal times, the two rates would be closer to each other.

Speaking before the House Budget Committee about the financial crisis, Bernanke said a stimulus package may be appropriate since the economy is likely to be weak for a while. Any such program should be designed to have immediate impact and promote access to credit, he said.

"With the economy likely to be weak for several quarters, and with some risk of a protracted slowdown, consideration of a fiscal package by the Congress at this juncture seems appropriate," Bernanke said.

Democrats, including House Speaker Nancy Pelosi, have touted the need for a second economic stimulus package, but it has received a cool reception from the Bush administration.

Economists are also watching earnings reports for evidence of how the financial crisis has already impacted corporate balance sheets and the outlook for the rest of the year. Two toy giants reported earnings today: Hasbro beat expectations today, while Mattel fell short. In statements, executives from both companies said they were optimistic about the holiday shopping season.
In light of the recent global economic environment, our business performed well in the quarter," Robert A. Eckert, Mattel's chairman and chief executive officer, said in a statement. "The all-important holiday season, however, is ahead of us."

Mattel and Hasbro closed down 2 percent and 4.2 percent, respectively.

Meanwhile, oil prices continued their rebound today. After a three-month slide, crude oil prices were up 2 percent, or $1.69, to $73 a barrel. Prices have been dragged down by expectations that the financial crisis would dampen demand. But the Organization of Petroleum Exporting Countries, or OPEC, is expected to announce this week it would cut oil production.

The rebound has helped shares of energy companies. Exxon Mobil closed up 10.2 percent, Conoco Phillips up 9.9 percent, and Chevron up 11.6 percent.