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Recession Risks Amid slow growth up, debt standoff

WASHINGTON - The economy IS at risk of slipping Into Another recession.

It stalled in the first Nearly six months of the year, the government Reported Friday. Economic growth in the WAS feeble second quarter and Practically non-existent in the first.

The new picture of Far Weaker Than economy year MOST HAD Analysts Expected Suddenly made a second recession was more serious Threat - And The Threat will rise if Congress can not reach a deal to raise the government's debt limit.

"The only issue now IS, How Much Weaker Could Things Get?" says Nariman Behravesh, chief economist at IHS Global Insight.

In April, May and June, the Economy Grew at a 1.3 percent Annual rate, below expectations.And the government changed icts growth figure for January, February and March to 0.4 percent, far below the previous estimate of 9.1 percent.

Combined, the first half of the year Amounts to the worst six-month performance Since the Great Recession Officially ended in June 2009.

Over the past year, the gross domestic product - the total output of goods and services in the United States, and the broadest measure of the economy's health - Recorded Actual growth of 1.6 percent.

Since 1950, year-to-year growth dipped below 2 percent HAS 12 times. Ten of Those times, the economy in recession or WAS Already Fell Into one soon, says Mark Vitner, senior economist at Wells Fargo Securities.

Normal Economic Growth IS closer to 3 percent.

High gasoline Prices leave people with less money to Spend on Other goods and services. And not all Spending on gas contributing to the U.S. economy Because Some of the money goes to oil-producing Countries.GDP figures are inflation-adjusted aussi, n Spending $ 1 more for a gallon Does not Mean of Additional $ 1 to help the economy.

Manufacturing disruptions from the earthquake Japan, cuts in state and local government budgets and tight Household Have weighed down the economy, too.

Add to Those Problems The Uncertainty fanned by The Political stalemate in Washington, with Republicans Refusing to raise the federal government's $ 14.3 trillion borrowing limit UNLESS AUTHORIZED Democrats Federal Spending to deep cuts on the GOP's terms.

Without agreement year, the Treasury Department says, the government Will not Have Enough Money to Pay Bills After all icts Tuesday. It Will Have To Cut Spending by about 40 percent and choose Which Programs and Beneficiaries Receive money and Which Do not.

The dismal second-quarter report led economists to Reduce Their Estimates for growth in the second half of the year.Capital Economics, the economy Which HAD Expected to grow 2.5 percent this year, now says 2 percent looks more likely no fax payday loans.

Joel Naroff of Naroff Economic Advisors says He's waiting Until the debt-limit deadline passes to revise history Economic Forecasts for the rest of 2011. He knows He'll scale back history Estimates. He just does not know how much.

If a deal Is not Reached For Another month, Naroff Estimates There's an 80 to 90 percent chance the Spending Cuts That Would tip Into the economy recession. Even if There Is a deal, It Would Likely trigger significant Spending Cuts That Would slow growth, at least in the short run.

"You kick the federal government, and the economy IS going to Be Doubled over in pain," Naroff says.

Federal Reserve Chairman Ben Bernanke and Other economists Have Warned Against Congress cutting too much too soon Because The Remains economy so fragile.

Needs to expand the economy so it Can create jobs for a Growing population.It must grow at a 2.5 percent Annual rate to keep rising from the Unemployment rate and at a 5 percent rate to Bring Unemployment Down Significantly.

In a Twitter message, economist Justin Wolfers of the University of Pennsylvania's Wharton School Said HE Thinks There's a 40 percent chance the economy HAS Already Been in a recession for the past months oven.

Normally, When the economy is this weak, the government and Spends more aggressively the Federal Reserve tries to Stimulate growth. President Barack Obama's goal $ 862 one billion stimulus package of tax cuts and Spending Programs ran out last year - and Will not Be Revived by a Congress Focused on cutting government debt.

And the Federal Reserve last month ended a $ 600 one billion bond-buying program Designed to jolt the economy by Lowering long-term interest rates and lifting stock prices.

The Fed IS Keeping Short-Term Interest Rates near zero, Bernanke and the Fed this month Said IS Prepared to do more if the weak economy Remains. Order the central bank has-been more worried about a resurgence of Recently inflation.

The Private Sector Has not Picked up the slack. The Housing Industry, Which Usually drives Economic Recoveries, Is Still Depressed After Home Price started tumbling in 2006 and 2007.

Americans are still Carrying heavy Debts, And What They've made little gains in Wages Have Been eaten up by Higher gas and food prices. Businesses, getting more work out of downsized staffs DURING the recession, are reluctant to hire Until They're sure dirty Their Will pick up.

"What Business is going to hire Into the unknown?" Naroff says.

Recession Risks Amid slow growth up, debt standoff

Wall Street falls on weak economic data, debt setback

NEW YORK (Reuters) - Stocks Dropped for a fifth straight day on Friday After data on the weak economy and a setback on a debt deal Discouraged investors, pushing the S & P 500 below a key technical Briefly level.

The Dow, the Nasdaq as well as the S & P Fell more than 1 percent early in the session, order soon pared Losses After the S & P 200 hit icts-day moving average, an important level of technical support.

The U.S. Economy Grew less than expected in the second quarter, Expanding at a 1.3 percent Annual rate, as consumer Spending rose barely Amid Higher gasoline prices.

Further pressuring the market, a survey found consumer sentiment in July Fell to Lowest Point in icts More than Two Years as anxiety over rising Stagnant Wages and Unemployment deepened.

"This leads me to Believe That UNLESS Dramatic Something Happens, We Will not Get Much Economic Growth in the second half of the year.That's Regarding, "Said Malcolm Polley, president and chief investment officer of Stewart Capital Advisors in Indiana, Pennsylvania.

The Dow Jones industrial average (. DJI) Fell 80 no faxing 1 hour payday loans.03 points, or 0.65 percent, at 12,160.08. The Standard & Poor's 500 Index (. SPX) down 8.22 WAS points, or 0.63 percent, at 1,292.45. The Nasdaq Composite Index (. IXIC) Dropped 19.68 points, or 0.71 percent, at 2,746.57.

WAS Wall Street on track to post worst weekly icts Loss in More than a year.

The S & P lost 3.9 percent HAS so far this week. The last time the index was this much Fell weekly BASIS WAS in early July last year.

Republican leaders scrambled to rescue Their budget deficit-cutting plan Friday After conservative mounted a rebellion heaped That Uncertainty on efforts by Washington to Avert a debt default.

Chevron Corp (CVX.N), the second-largest U.S.Oil Company Reported a 43 percent jump in quarterly profit, beating strong as Oil Prices Estimates and fatter refinery margins offset a drop in oil output. Still, shares Fell 0.4 percent to $ 104.55.

(Reporting by Angela Moon; editing by Jeffrey Benko)

Wall Street falls on weak economic data, debt setback

Greece sufferer new credit downgrade

ATHENS, Greece - Standard and Poor's agency HAS cut Greece's credit rating by two notches to CC, with a negative outlook.

The international ratings agency says the Proposed Restructuring of Greece's heavy debt load Under a new international bailout deal Would Amount to a selective default.

A Standard and Poor's statement says the likelihood of a future Greek Default is Likely to Remain High.

THIS IS A BREAKING NEWS UPDATE. Check back soon for Further information.AP's story IS Earlier below.

ATHENS, Greece (AP) - Greece HAS Appointed BNP Paribas, Deutsche Bank and HSBC to act as dealer-manager for a voluntary scheme Private Sector Participation, Which is Part of the country's second Financial bailout payday loans for bad credit.

The finance ministry says The Three banks Were Appointed in the wake Wednesday of last week's EU-led bailout package, Which is Worth Altogether euro109 billion ($ 157.7 billion).

Cleary Gottlieb Steen and Hamilton LLP HAS Also Been Appointed international legal adviser, while Lazard Freres Is To Be The Financial Adviser.

Under the voluntary scheme, banks and large private investors Will Other Greek swap bonds for new debt instruments with long maturities.

Greece sufferer new credit downgrade

Hot News: Wall Street opens flat, earn offset debt talks

Wall St Declines as debt talks stall

NEW YORK (Reuters) - Stocks Fell on Thursday as Continued Political sparring in Washington over the debt ceiling Heightened worries of a U.S. rating downgrade, Sending world equities lower.

The rival budget plans Pursued Congress That Appeared Unlikely to Win Broad Support, pushing the country closer to a debt default and the loss of STI coveted triple-A credit rating.

"This game of chicken Whole IS fraught with risk ... risk for everybody. Risk for the investors, for the consumer, to the economy, to Americans, to Europeans, risk across the board," Said Ken Polcari, managing director at ICAP Equities in New York.

Still, analysts ultimately a Deal Expected by the August 2 deadline."What the market IS telling you Is That deal although it THINK IS going to get done, it's going to wait and see What IS the ultimate deal to decide whether the market likes it or not," Polcari said.

The Dow Jones industrial average (. DJI) Dropped 63.58 points, or 0.50 percent, to 12,617.58. The Standard & Poor's 500 Index (. SPX) slipped 6.39 points, or 0.48 percent, to 1,338.63. The Nasdaq Composite Index (. IXIC) Took off 12.65 points, or 0.44 percent, to 2,846.18.

Reflecting investor anxiety, the CBOE Volatility Index (. VIX) climbed 10 percent Nearly, ITS Biggest Percentage Increase in Two Weeks.

The MSCI world equity index (. MIWD00000PUS) Fell 0.4 percent.

The Uncertainty over the debt ceiling Pushed to record highs Gold Price as the fear of default has raised the appeal of the greenback versus the bullion low rates payday advance.The dollar to a record low Fell Against the Swiss franc, while gold hit a new high.

In company news, US-listed shares of Research In Motion Ltd (RIM.TO) (RIMM.O) Were off 4 percent to $ 26.78 After the BlackBerry maker Said It Will cut about 11 percent of workforce as it icts Struggles to Compete Against Apple Inc. (AAPL.O) and Google Inc. (GOOG.O).

Continued to earnings in for. Kimberly-Clark Corp (KMB.N) shed 6.1 percent to $ 66.82 After the maker of Kleenex tissues and Huggies diapers May Be Said in 2011 profits at the low end of forecast icts, Even As second-quarter revenu topped expectations.

Through Monday morning, 154 S & P 500 companies Reported quarterly results, with 75 percent topping Estimates, According To Thomson Reuters data.

Also unsettling investors, credit rating agency Moody's cut Greece's sovereign debt by Three notches to 'Ca', one level Above default.Greece Has the Lowest Rating of Any Country in the World Covered by Moody's.

Volume WAS light with about one billion shares traded 2.52 on the New York Stock Exchange, NYSE and Amex Nasdaq, below the daily average of 7.44 billion.

(Reporting by Chuck Mikolajczak, editing by Jeffrey Benko)

Wall St Declines as debt talks stall

Optimism for Digital Plan, But Times Co. Posts Loss

The New York Times Company Reported on Thursday Nearly a quarter of That a million people HAD Purchased subscriptions to The Times new digital editions, a sign That WAS ITS digital strategy Paying off so far.

Since March, When The Times Introduced ITS model to charge online readers, The Times HAS signed up to 224.000 Paying Subscribers NYTimes.com, in addition to 57.000 Others Who Receive pay to The Times on e-readers like the Barnes & Noble and Amazon Nook Kindle.

As the introductory rate expires and more begin Customers Paying the full price, Which starts at $ 15 weeks Every oven, The Times Expects to see more of a Benefit to ITS bottom line.

"The digital subscription model IS a long-term effort, and Its full impact on revenues Will Be more evident over the course of the year as we progress past the early stages of the plan," Said Janet L. Robinson, the chief executive.

Ms.Robinson added the digital subscriptions That Would Provide the company "with a significant new revenue stream in the second half of this year."

The announcement cam on the Same Day as the company's quarterly earnings report. The company Said It Had a net loss of $ 119.7 million in the second quarter, in a hand Because Of noncash write-down of $ 161.3 million to Reflect Declining value of the ITS regional newspapers.

Earlier this month the company sold more Than half of STI Minority ownership in the Boston Red Sox and several Other sports properties, raising $ 117 million Before taxes. And last week it plans to pay back Announced a $ 250 million loan from Carlos Slim Helu, a Mexican telecommunications billionaire, on Aug. 15, Three and a half years ahead of schedule.

Over all, Wall Street Analysts and investors reacted with Optimism, pushing the company's stock price up Nearly 2 percent in trading on the New York Stock Exchange.Shares closed at $ 9.14.

Aim the second quarter aussi Challenged Showed how the print advertising market Remained. Revenue Declined 2.2 percent, to $ 576.7 million from $ 589.6 million, in large part to Because Of 4 percent DECREASE in advertising. Said the company at 2 instant payday loan.6 percent Increase in online advertising revenue Partly offset about 6.4 percent decline in print advertising. At the News Media Group rose 15.5 percent digital advertising, a sign That charging readers for access to NYTimes.com Was Not discouraging Advertisers.

Operating Costs Declined by Nearly 1 percent, to $ 525.2 million in the quarter, the company said.

Home delivery orders aussi ticked up, Helping to slow the rate of decline in print circulation revenue. Over all, the company's circulation revenue for the quarter WAS flat at $ 234.9 million, Reflecting the Decline and print the introductory 99-cent rate for the first month of digital subscriptions.Circulation revenue up 1.6 percent WAS at The New York Times Media Group, down 5.4 percent goal at the New England Media Group, Which includes The Boston Globe, down 1.7 percent and at the regional papers.

EXCLUDING one-time items like the write-down and severance costs: the company's operating profit in the quarter WAS $ 82.9 million, Compared with $ 92.6 million in the year Earlier Period A. We per-share Basis, the net loss translated Into 81 cents, in contrast to a profit of 21 cents a share, or $ 32 million, a year in the Earlier Period.

The advertising company cautioned That Would Remain Soft in the Third Quarter, drank Said It Expected Increase in moderate traffic and revenue Declining operating cost.

Alexia S. Quadrants, a stock analyst with JP Morgan, Called the second quarter results "good" and Said That despite the Declining print ad market, There Were Reasons for Optimism in the Third Quarter.

"Any Adjustment to Be Likely Will print advertising offset by better traffic trends from the digital initiatives and Improved Profitability, Which When combined with lower interest Expense from the prepayment of the Notes Carlos Slim, a positive impact Should Have," She Said in a note to investors.

Optimism for Digital Plan, But Times Co. Posts Loss

Microsoft Posts Profit Increase 30%, Sales goal of Windows Are Weak

SAN FRANCISCO - Microsoft Reported STI weak sales of core operating system on Thursday while icts entertainment products thrived.

Microsoft Trying to Overcome IS muted demand for computers Caused by Increasing the demand for tablets, Which do not run on Microsoft software. Sales of the company's Windows operating system are Closely tied to PC Shipments, Which Grew only modestly in the last quarter.

That Microsoft's Reported Net Income in the fiscal fourth quarter, Which ended in June, rose 30 percent to $ 5.87 billion, or 69 cents a share, from $ 4.52 billion, or 51 cents, in the year-ago quarter.

The company climbed 8.5 percent revenue Said, one billion from $ 17.37 to $ 16 billion.

The WAS Net Income Above the expectations of Wall Street Analysts. THEY HAD 58 cents a share Expected and revenue of $ 17.25 billion, According To Analysts by a survey of Thomson Reuters.

"We continue to see strong demand across all business of our products, Small Businesses from all the way up to the Largest Global Enterprises," Said Kevin Turner, the company's chief operating officer, in a news release. "THROUGHOUT fiscal 2011, we Delivered to market a strong lineup of products and services, translated Into Which double-digit revenue growth and operating margin expansion," Said Peter Klein, chief financial officer at Microsoft.

Revenue from the unit That sells the Windows operating system software Fell 1 percent, to $ 4.74 billion. The division's fortunes are tied to PC sales Closely, Which Grew 2.6 percent worldwide in the quarter, According To IDC, the market research firm.

A shift by Consumers to tablets, Mostly Apple's iPad, IS Partly to blame. The limited appetite for computers IS MOST worrisome to Microsoft Because tablets are run Apple's operating system or Google's Android.

Tablet Manufacturers Have Shown little interest in Adopting Windows, leaving Microsoft out of turning Into What Is Far More than a niche product. Sales of tablets are Expected to triple to 43 low fee cash advance.6 million in 2011 from a year Earlier, According To eMarketer, a market research firm.

Meanwhile, Microsoft est aussi Struggling with getting STI Phone Windows 7 operating system on smartphones. Earlier this year, Nokia to make phones Agreed That use Windows, the partners aim to Introduce yet Have Any devices.

Ominous sign in a year, Nokia said on Thursday icts That Fell smartphone sales 32 percent in the quarter. The decline shows eroding demand for Nokia's products and the Microsoft faces Difficulty in using em as a stepping stone to compete against-the Apple iPhone and Google Android phones.

The company Stiller Has Strength. Revenue from ITS Office software, Which includes Word, Grew 7 percent, to $ 5.78 billion.The company HAS Said That the latest version, Office 2010, Is Its fastest-selling version ever.

Revenue from servers and tools, a Division Focused on corporate products, Grew 12 percent to $ 4.64 billion.

A bright spot in Particular Microsoft's portfolio WAS ITS entertainment products and devices like the Xbox 360 video game console and the controller Kinect game, Which lets users move Their Bodies to control characters in video games. Sales by the division Grew 30 percent, to $ 1.49 billion.

Revenue from Microsoft's online properties, like the MSN portal and search engine Bing, rose 17 percent, to $ 622 million. The unit posted $ 728 million in operating loss, a streak of red Continuing ink.

Took over Microsoft's Yahoo search engine in year effort to better compete with Google. Goal so far, the partnership failed to lift HAS online advertising revenue as Much as executive Originally Told investors.

Shares of Microsoft rose just over 1 percent to $ 27.43 in after-hours trading. In regular trading, closed THEY Nearly flat at $ 27.10.

Microsoft Posts Profit Increase 30%, Sales goal of Windows Are Weak

Bookstore chain Borders writes final chapter

NEW YORK (AFP) - Embattled U.S. bookstore chain Borders Said It Would liquidate Monday After failing to find a buyer Amid The Growing popularity of e-books and the slow economy.

Borders, filed for Chapter 11 Which bankruptcy protection in February and hoped to Attract a bidder as it reorganized, Said It Would STI closed 399 stores.More than 10.000 People Will Lose Their Jobs.

Borders Said It Will seek short-Approval of a Previously Announced Thursday Proposal from Liquidators Hilco and Gordon Brothers to buy the assets of the store and start the business liquidation, in the lack of a formal Proposal from anyone else Who would keep the business alive.

"Following the best efforts of all parties, we are saddened by this development," Said Borders Group president Mike Edwards.

"We were all working hard Towards a different outcome, we purpose the headwind for quite facings Have Been Some Time, Including the Rapidly Changing Book Industry, eReader revolution, and turbulent economy, Have Brought to us Where we are now Payday Loan for Bad Credit."

Under the Proposal and subject to short-Approval, the liquidation IS Expected to Begin for Some stores and facilities as soon as Friday, with a phased rollout of the program Expected to wind up by the end of September.

Borders Said It Intended to liquidate Under Chapter 11 of the Bankruptcy Code and, as a result, it Expected to Be Able to pay vendors for all Expenses incurred You DURING the bankruptcy boxes.

Borders in early July HAD Announced That It Had a bid from investment firm Najafi Which wanted to keep the chain going, goal last week Edwards Confirmed That Najafi HAD WITHDRAWN.

In July 2010, Borders year Launched online store for e-books to challenge Amazon, Apple, and others Already In The Fast Growing digital books market.

Many aim Industry Analysts Said the move cam too late.

Bookstore chain Borders writes final chapter

Three dead in NATO attacks on tankers in Pakistan

PESHAWAR, Pakistan (AFP) - Three People were Killed and 16 Wounded When militants blew up one oil tanker and NATO supply Opened On Another fire in Pakistan's troubled northwest, police and Officials said.

The first incident Took place near a market in a suburb of Peshawar, close to the Khyber tribal district, a remote controlled bomb When Went off late Sunday, triggering a huge fire and Destroying up to 100 shops, police said.

"The remote-controlled device Planted Under The tanker exploded Before It Entered the tribal area, the five Fire Engulfed HAS Markets," Ijaz Mohammad Khan, a senior police officer, Told AFP.

Khan Said the blaze up to 100 shops Destroyed Before the fire service it Brought Under Control.

"Two People were Killed and 15 Wounded Were Other, militants Were Involved in this attack, 'he added.

In the second attack, around 10 km from the site of the first, militants late Saturday Opened Fire on Another oil tanker in the town of Jamrud, in Khyber tribal district the, killing the driver and wounding helper history, local official Arshad Khan Told AFP low fee payday advance.

An intelligence official in Peshawar Said Were Both tankers carry carrying fuel for NATO Troops in Afghanistan. No group HAS Claimed Responsibility for the attacks aim the official Taliban militants Blamed for the attacks.

Most supplies and equipment required by foreign Troops in Afghanistan are Transported Through Pakistan.

Taliban and Al-Qaeda-linked militants launch attacks across Frequently northwestern Pakistan and the lawless tribal belt on the Afghan border.

Three dead in NATO attacks on tankers in Pakistan

Citigroup profit jumps 24 percent, beats forecasts

NEW YORK (Reuters) - Citigroup Inc. 's second-quarter profit 24 percent have Jumped the bank lost less money than expected on bad U.S. loans.

Credit Losses Dropped 35 percent at the Third-largest U.S. bank, Which Allowed Into dip it to set aside money to cover Previously bad loans. The bank's revenue from securities underwriting and merger advisory Jumped 61 percent.

Many Businesses goal Citigroup suffered. The bank's main Continuing Businesses, Known as Citicorp, posted a 2 percent decline in net income options.The only business to boost profit Citicorp WAS retail banking, Which Mainly benefited from lower credit Costs in the United States.

"I still think THEY Have a lot of work to do," Said Matt McCormick, portfolio manager at Bahl & Gaynor Investment Counsel in Cincinnati.

It has conference call with investors, Citigroup Chief Executive Vikram Pandit cautioned That Uncertainty in the Global Economy Could weigh on the banking Industry in the second half of this year, Said His purpose bank IS comfortable with Broader Macroeconomic trends.

Pandit Citigroup HAS stabilized by selling off bad assets, allowing the bank repaid the $ 45 to one billion of government bailout money Took it DURING the Financial Crisis.

He Is Trying now aim to show investors Citigroup That Can Move Beyond recovery to growth. Second-quarter results Were not heartening to Some investors On That front. Overall revenue Fell 7 percent from a year Earlier.Operating Expenses rose.

Citigroup Reported Net Income of $ 3.34 billion, or $ 1.09 per share, bettering the 96-cent average estimate of Analysts polled by Thomson Reuters I / B / E / S. A year Earlier it Earned $ 2.7 billion, or 90 cents per share Adjusted for a reverse stock split.

The results cam a day after JPMorgan Chase & Co. posted solid earnings, raising investor Hopes for strength across the banking Sector.

ELUSIVE 'NEW NORMAL'

Boosting business this year has-been difficulty for U.S payday advance lender. MOSTbanks, as weak fixed-income trading and market volatility Have Heavily weighed on results.

"Like everyone else, What we're looking to determined over the next quarters SEVERAL IS, What is the 'new normal' level for activity," Citigroup Chief Financial Officer John Gerspach said on a conference call with reporters.

"I'm not quite sure That We Understand That Is Exactly Where right now," He Said in response to a question about trading can Layoffs.

Revenue at Citigroup's securities and banking unit, ITS Commercial and Investment Bank, Fell 8 percent, hurt by year 18 percent decline in fixed-income trading, to $ 3,033 billion.

That decline offset by WAS Partially Big Increase in underwriting and merger advisory fees.Revenue for debt underwriting, equity underwriting and merger advisory rose 61 percent to $ 1,085 billion.

Income Falling in commercial and investment banking Pushed Citicorp's earnings down 2 percent to $ 3.66 billion. Losses in Citi Holdings, Where the Bank House Business and It Is shedding assets, TotalEdit $ 218 million.

Citigroup Said Overall revenue Fell Almost 7 percent to $ 20.6 billion, Slightly Better Than the one billion $ 19.9 Expected by Analysts.

Citi Holdings successfully slimmed down assets DURING the quarter by $ 29 billion, to $ 308 billion. At the Beginning of 2009, Citi Holdings HAD $ 599 one billion of assets.

Overall assets at Citigroup rose about 0.5 percent DURING the second quarter, to $ 1,956 billion, signaling the bank That Reducing IS ITS ITS Growing problem assets and hand Continuing Businesses.

Citigroup shares Were off 8 cents to $ 38.94 in midday trading as high as After rising in early dealings $ 40.38.

(Reporting by Maria Aspan; Additional reporting by Joe Rauch in Charlotte and David Henry in New York, editing by John Wallace)

Citigroup profit jumps 24 percent, beats forecasts

Fed "Prepared to Respond" if worsen economy: Bernanke

WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke said on Wednesday the central bank to ease IS ready Monetary Policy Weaken Further if the economy and inflation moves lower, hinting Policymakers Were Actively mulling Further stimulus.

While holding to view a Recent Economic softness That Would Eventually pass, ET Appeared less confident in That projection - and more Willing to entertain the Possibility of Another round of stimulus.

"The Possibility That Remains the Recent Economic Weakness May PROVE more persistent than expected and deflationary Risks That Might reemerge, implying a Need for Additional policy support," Bernanke Told the House of Representatives Financial Services Committee.

Noted specifically Bernanke Fed forecasts for June, Which Were Already Significantly revised down from April, Had not Incorporated recent data, particularly last Friday's dismal Employment Report.It Showed job growth ground to a halt Essentially in May and June, while jobless rate rose to 9.2 percent.

U.S. stocks, Which Have taken a drubbing over the last week on worries about Europe's debt problems and we Concerns about the U.S. economic outlook, rallied 1.2 percent, while Treasury Bond Prices and the dollar tumbled.

"The Federal Reserve Remains Prepared to Respond Economic Developments Should Indicate That year Adjustment in the stance of monetary policy Would Be Appropriate," Bernanke said.

Pressed on the budget DURING the question-and-answer session, Bernanke reiterated warning That history has the U.S. failure to raisedebt ceiling deal a severe blow Would to the Global Economic Recovery.

Minutes from the Fed's June meeting, released on Tuesday, Showed Some Policymakers Should Believe the Fed stand ready to Provide more support to the economy if the recovery flags, rekindling the Threat of a debilitating Downward Spiral in Price and wages payday loan lenders.

Others on the policy-setting Federal Open Market Committee, however, felt Inflation Risks Might force the central bank to Withdraw stimulus Sooner Than Anticipated Currently IS.

DOOR OPEN TO QE3

Still, Given the change in tune, Some Were investors betting the more dovish members of the committee Would win the day in pushing for a Third round of quantitative easing if the economy continued to deteriorate.

"My initial reaction was 'EQ3 here we come'," Said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.Gross domestic product expanded just 1.9 percent in the first months of the Year Three, and the second quarter to look Does not Have Been Much Better.

Bernanke Held to view the recent Weakness That WAS due to temporary factors by hand in like high energy effects on the Costs and Global Industry from Japan's earthquake and tsunami.

Purpose ET Acknowledged the Labor Market Remains Weaker Than Would like the Fed.

"The most recent data attest to the Continuing Weakness of the Labor Market," Bernanke said.

Bernanke Defended the second round of bond buys Against Critics Who Said It Had Been ineffective.

He Said the Fed Estimates round two of quantitative easing, or QE2, Lowered long-term interest rates by Between 0.1 and 0.3 per centage point, Which Would Be Said Bernanke Roughly equivalent to a 0.40 to 1.20 per centage point decline in the federal funds rate, Which Currently IS set in a range Between zero and 0.25 percent.