NEW YORK — Major stock indexes rose Monday 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 because that would make a big shift in interest-rate policy far less likely.
Key senators including Max Baucus of Montana and Dianne Feinstein of California said Monday 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.
Senate Majority Leader Harry Reid, D-Nev., expects a vote by the end of the week, his spokesman said Monday.
Bernanke’s brightening prospects provided the White House with a rare bit of good news amid political upheaval caused by simmering public anger over the economy, joblessness and bank bailouts.
“Chairman Bernanke helped the president and the economic team steer through some very turbulent times in rough waters,” White House spokesman Robert Gibbs told reporters during his daily briefing.
The Dow rose 23.88, or 0.2 percent, to 10,196.86 after being up as much as 84 points. The fluctuations were modest, however, after five straight days in which the Dow moved by more than 100 points.
The Standard & Poor’s 500 index rose 5.02, or 0.5 percent, to 1,096.78, while the Nasdaq composite rose 5.51, or 0.3 percent, to 2,210.80.
The Dow Jones industrial average had lost 552 points over the previous three days. The Dow skidded from Wed nesday to Friday of last week as President Barack Obama stepped up his campaign to tighten oversight of banks and on worries about Bernanke’s tenure.
Bernanke’s term expires Sunday.
Bernanke was a key player in guiding the nation through the worst financial crisis since the 1930s and has pledged to keep interest rates low to stimulate the economy. That has helped boost the stock and bond markets while also providing a steady supply of cheap funding to banks.
Many traders don’t want to see a change, because that would bring another set of unknowns for a market already burdened by uncertainty about the economy.
Russell Croft, portfolio manager at Croft Leominster Investment Management in Baltimore, said questions about what will happen with Bernanke as well as bank regulation and possible changes to health care have brought concerns that Washington will spoil a recovery.
“Any time you get the political haranguing going on — worries about the Fed chief or whatever — it’s obviously going to spook the markets,” Croft said.
The questions about Bernanke’s reappointment come as Fed policymakers are set to gather today for their first meeting of the year on interest-rate policy.
