Bernanke And Buffet Speak, Markets And Financial ETFs Smile

Stocks and exchange traded funds (ETFs) rose Friday morning after some hopeful words from Federal Reserve Chairman Ben Bernanke.

He said that while the inflation outlook is uncertain, the recent decline in commodity prices and the stabilization of the U.S. dollar are encouraging signs, report Mark Felsenthal and Alister Bull for Reuters. If this sticks, he says, inflation should be moderate both this year and next.

All hints suggest that Bernanke will keep interest rates steady for the time being.

Oil is down $3 so far today, thanks to a stronger dollar and profit taking after Thursday’s jump, reports Bate Felix for Reuters.

Financials also found themselves on surer footing following the news that Lehman Brothers may have attracted a major investor, according to Ellis Mnyandu for Reuters. Warren Buffett also spoke on television that he has no bets against the U.S. dollar, and he also expressed confidence that the government would take steps to support Fannie Mae and Freddie Mac.

Among the ETF leaders in early trading include:

• PowerShares FTSE Rafi Financial (PRFF), down 31.1% year-to-date
• iShares Dow Jones U.S. Broker Dealer (IAI), down 37.7% year-to-date
• Rydex S&P Equal Weight Financial (RYF), down 27.6% year-to-date
• Financial Select Sector SPDR (XLF), down 29.7% year-to-date

Read the disclaimer, as Tom Lydon is a board member of Rydex Funds.

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