Updated from 2:42 a.m. ET with market close information.
The broad indices all ended higher, with the
Dow Jones Industrial Average
The Federal Open Market Committee's "highly accommodative" policy includes keeping the short-term federal funds rate in a range of zero to 0.25% since late 2008. The Federal Reserve has also been making monthly purchases of $85 billion in long-term bonds by the Fed since September.The market has looked ahead to a rise in long-term rates that will result from the eventual reduction of securities purchases by the central bank, by sending the yield on 10-year U.S. Treasury bonds up considerably from the end of April, when the market yield was just 1.70%. The yield on the 10-year was 2.53% Thursday afternoon, up slightly from Wednesday. On Thursday, Bernanke made concessions to Senators who seem never to be satisfied with large U.S. banks' capital levels. The Fed chairman said final rules to implement Basel III, along with new rules proposed last week to require the largest U.S. banks to maintain supplementary Tier 1 leverage ratios twice as high as required under Basel III should be viewed as a "floor" and not as a ceiling. In an exchange with Senator Elizabeth Warren (D., Mass), Bernanke indicated the Federal Reserve could raise capital requirements further. The KBW Bank Index (I:BKX) was up 2% to 65.86, with all but two of the 24 index components showing afternoon gains.