Ben Bernanke photo by Getty Images
The Associated Press
WASHINGTON - Fed Chairman Ben Bernanke says the U.S. economy has weakened and the Federal Reserve is ready to take further action to bolster growth if conditions don't improve.
But Bernanke provided no clues about what steps the Fed might take or whether any action was imminent.
Investors were hoping Bernanke would signal that the Fed was ready to launch another round of bond purchases, which aim to drive down long-term interest rates and encourage more borrowing and spending.
Bernanke, giving the Fed's midyear economic update to Congress, says the economy will likely continue to expand moderately. But he says the economy's meager growth would slow further if Europe's debt crisis worsens or if Congress doesn't address an impending budget crisis before the end of the year.
The stock market wavered after Bernanke's grim assessment of the economy. Stronger earnings reports from Mattel, Coca-Cola and other big companies pushed those stocks higher Tuesday.
Mattel rose 9 percent, more than any other company in the S&P 500. The country's biggest toy maker said net income rose on better sales of Barbie dolls and lower advertising costs.
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