US markets cautious after Bernanke speech

US markets were treading water this afternoon following a cautiously optimistic speech by US Federal Reserve chairman Ben Bernanke.

He said the economy has shown signs of improvement, but conceded it remains vulnerable to shocks, and he called on lawmakers to reduce the long-term US budget deficit, Bloomberg reports.

The S&P 500 inched up 0.11% to reach 1,325, while the Dow Jones gained 0.6% to 12,724.

Analysts had expected a stronger open following the release of some better than expected economic indicators this morning.

Initial weekly unemployment claims fell by 12,000 last week, to 367,000, while fourth quarter labour productivity rose by 0.7% on the quarter compared to the consensus expectation of 0.8%.

The FTSE 100 edged up 0.15% to 5,799, the French Cac 40 gained 0.42% to 3,381 and the German Dax rose 0.4% to reach 6,643 in afternoon trading. 

Confirmation of a merger between Swiss commodities giants Glencore and Xstrata sent the two stocks to the top of the pile, with Xstrata jumping 10% and Glencore rising 7%. A merger of the two firms would create a leviathan valued at around £52bn.

On a less positive note, Greece has requested a further €15bn in bailout funds from the eurozone after a fresh black hole was discovered by international debt inspectors.

Additional reporting by ShareCast