Wall Street was higher after remarks from both President George W. Bush and Federal Reserve chairman Ben Bernanke.
In early afternoon trade the Dow Jones Industrial Average had added 1.19 percent to 13,396.43, while the Nasdaq Composite was up 1.05 percent to 2,592.16 and the S&P 500 was 1.29 percent higher to 1,476.46.
Mr. Bush called on congress to send him legislation to modernize the Federal Housing Administration, which provides mortgage insurance through private lenders, but said that the government will not bail out what he characterized as “speculators”.
He also asked lenders to work with homeowners to renegotiate mortgages at lower interest rates.
Mr. Bush’s plan also calls for the creation of a program called “FHA-Secure”, which will allow the FHA to refinance the loans of homeowners with good credit but who have not been able to make all their payments due to rising interest rates.
Mortgage lenders saw gains in the wake of these comments. Countrywide Financial (NYSE: CFC) was 14 cents higher to $19.78, while Accredited Home Lenders Holding (NAS: LEND) gained $2.38, or 37.72 percent, to $8.69 after Lone Star Funds said it is willing to purchase the subprime lender at a lower price than previously agreed.
Banks also benefited from the marks from the President and the Fed chairman.
Citigroup (NSYE: C) added 53 cents to $46.76, while JP Morgan Chase (NYSE: JPM; TYO: 8634) gained 65 cents to $44.62 and Bank of America (NYSE: BAC) was 73 cents higher to $46.76.