Milan, other European markets rally Wednesday

U.S. Fed's pledges to maintain stimulus boost markets

Milan, other European markets rally Wednesday

Milan, May 22 - Milan's leading financial market rose alongside most other European markets Wednesday, all buoyed by pledges that the United States Federal Reserve intends to keep its foot on the gas pedal. Markets rallied after Ben Bernanke, Fed chairman, told Congress that despite recent improvements in the American job market, the Federal Reserve needs to continue its stimulus efforts. Otherwise, changes to monetary policy could put the nascent US recovery at risk, Bernanke added. Stimulative policies in the U.S. economy - essentially, injections of liquidity - have been important in promoting economic growth in its many trading partners. On the Milan Stock Exchange, the FTSE-Mib gained 0.68% to close trading at 17,545 points. Meanwhile, Italy's debt market also showed some strength, narrowing the spread between Italian and German debt. The spread closed trading at 248 basis points - its lowest level since January 30 - and slightly lower than Tuesday's close of 253 basis points. The yield on 10-year Treasury bonds ended Wednesday's trading at 3.90%. The spread between lending rates in the two countries is seen as an indication of investor faith in the Italian economy and its ability to cope with a lingering recession. On other European markets, Frankfurt's DAX climbed by fully 0.69% to close at 8,530.89 points, while Paris's CAC 40 rose by 0.37%, closing at 4,051.11 points, and London's FTSE 100 gained 0.53% to close at 6,840.27. Spain's IBEX 35 was essentially unchanged, closing at 8,462.40 points.

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