Wall Street higher on hopes of credit recovery

Wall Street was mostly higher Monday as investors took signs of easing in the credit markets as evidence that government measures to revive the battered financial system are taking hold.

Investors shaken by extreme volatility over the past few weeks turned more optimistic as bank-to-bank lending rates eased further.

This has helped to temper recession worries, but Federal Reserve Chairman Ben Bernanke still warned that the economy is likely to be “weak for several quarters, and with some risk of a protracted slowdown.”

He told Congress in remarks before the House Budget Committee that a fresh round of government stimulus might help ease the country’s economic weakness.

“The market liked what Bernanke had to say, and there were hints that he’s leaving the door open for further moves in terms of rate cuts or economic stimulus,” said Ryan Larson, head of equity trading at Voyageur Asset Management. “And, with credit easing in slow baby steps, the market has started to realize that this is going to be a process.”