The Dow Jones industrials set a new high today as stocks extended their gains for a second day after Federal Reserve Chairman Ben Bernanke told a Senate panel the economy should grow modestly this year despite a slowdown in housing and that he expects inflation will continue to ease.

Stocks pulled back today after aluminium producer Alcoa Inc. kicked off earnings season with a weaker-than-expected profit report and minutes from the Federal Reserve’s last meeting stoked concerns about the economy.

Investors received some reassurance about inflation and the economy from Federal Reserve chairman Alan Greenspan today – and sent stocks higher as the market’s interest rates worries ebbed.

US recovery concerns will see the euro continue to gain ground against the US dollar, economists say.

US consumer spending rose in August for a fourth month as cash gained from reduced income tax withholding rates helped boost purchases at stores and auto dealerships, a government report showed.