Stocks Fall, Treasurys Up As Bernanke Outlook Gloomy

(Dow Jones)--Federal Reserve Chairman Ben Bernanke left investors disappointed after he painted a gloomy picture of the U.S. economy but gave no indication that the Fed is preparing any new stimulus measures.

Stocks and other assets with greater exposure to risk fell, while U.S. Treasurys gained sharply as Bernanke delivered his much-awaited semiannual address to Congress, describing the economic outlook as "unusually uncertain."

The Fed chairman reiterated the central bank's official view that interest rates would stay near zero for "an extended period." But although he stressed that it is "prepared to take further policy actions as needed to foster a return to full utilization of our nation's productive potential," he offered no new policy options for reversing the recent slowdown in the U.S. economic recovery.

In answer to senators' questions, Bernanke later explored the possibility of further stimulus measures "if the recovery seems to be faltering," but in failing to address this in his prepared remarks he left investors disappointed. (more)