Market turmoil: Dow Jones falls 99 points after Yellen testimony – as it happened

Market turmoil: Dow Jones falls 99 points after Yellen testimony – as it happened

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Earlier:

That’s all for tonight, after another lively day. A quick reminder of the key points.

Federal Reserve chair Janet Yellen has warned that the turmoil in the markets could hurt the US economy. She hinted the interest rates will only rise slowly, but tried to dampen speculation that the Fed could cut borrowing costs. Here’s our summary of her testimony to Congress.

The Dow Jones index closed down 99 points after Yellen spoke. The dollar weakened, as traders anticipated more dovish monetary policy this year.

European markets had rallied back from two-year lows, on hopes that the recent selloff had gone to far.

European stock markets, closing prices
European stock markets, closing prices Photograph: Thomson Reuters

Bank shares led the rebound, with Deutsche Bank gaining 10%, after Germany’s heavyweight began planning to buy back debt to strengthen its financial position.

Credit Suisse boss Tidjane Thiam became the latest top bank executive to call for calm. He argued that banks are in much better shape than before the 2008 crisis.

But Australia’s market earlier fell into bear territory, having lost 20% since its recent high last April. Japan’s Nikkei also suffered losses on Wednesday.

The International Monetary Fund threatened to pull the plug on Ukraine’s bailout. It wants its government to cleans our corruption and implements reforms.

And new data showed that Europe’s factory sector had a bad December; Britain’s industrial output fell by 1.1% during the month.

Goodnight! GW

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