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Positive remarks from the Federal Reserve chairman boosted stocks Wednesday, and the Dow Jones Industrial Average reached yet another new intraday record.

About an hour in to trading, the Dow was up 61 points, or 0.5%, at 12,716, having touched an all-time high of 12,720.47 earlier. Of the Dow’s 30 components, 24 were in positive territory, led by gains of 1.6% in Caterpillar (CAT) and Verizon (VZ) .

The S&P 500 was adding 9 points, or 0.6%, at 1453. The Nasdaq Composite was ahead by 24 points, or 1%, to 2484.

During his address to the Senate Banking Committee, Fed Chairman Ben Bernanke said the central bank is comfortable with interest rates and that some tentative signs of stabilization have recently appeared in the housing market.

“Inflation pressures appear to have abated somewhat,” Bernanke said in his prepared testimony, before adding that the “monthly data are noisy, however, and it will consequently be some time before we can be confident that underlying inflation is moderating as anticipated.”

Michael Sheldon, chief market strategist with Spencer Clarke LLC, said that Bernanke’s speech is exactly what the markets were looking for.

“His outlook includes solid growth in 2007 along with diminishing inflation concerns,” said Sheldon. “He did highlight that housing will be a drag for some time, but that sector is starting to stabilize. It’s what the markets wanted to hear.”

Bernanke will continue his Congressional testimony on Thursday when he addresses the House of Representatives.

U.S. equities got a nice boost Tuesday as talk of a takeover for Alcoa (AA) and an upgrade of GM (GM) helped spur buying. The Dow posted a triple-digit gain to 12,654.85, and the Nasdaq gained 9.50 points, or 0.39%, to 2459.88.

Before the opening bell, the Commerce Department said U.S. retail sales were unexpectedly flat last month, compared with a 0.9% rise in December. Economists expected a 0.3% increase. Excluding autos, January sales rose 0.3%, also less than anticipated.

Meanwhile, Treasury prices were on the rise. The 10-year note was up 16/32 in price, yielding 4.75%, and the 30-year bond was higher by 29/32 and yielding 4.84%. That action suggests the bond market is seeing less of a chance for rate hikes anytime soon.

On the corporate side, automaker DaimlerChrysler (DCX) announced a restructuring plan that will see it terminate roughly 13,000 jobs. Earlier, the company said fourth-quarter earnings fell 40% from a year earlier due to an operating loss out of its Chrysler Group. Shares were rising by $2.61, or 4.1%, to $67.06.

Among earnings, soft-drink giant and Dow component Coca-Cola (KO) posted fourth-quarter adjusted profits of 52 cents a share on revenue of $5.93 billion. Both numbers topped analysts’ consensus. Coca-Cola was off by 31 cents, or 0.6%, to $47.90.

Farm-equipment maker Deere (DE) got past Wall Street’s fiscal first-quarter estimates and said its second quarter and full year should be in line with the current forecasts. Deere shares were jumping by $7.03, or 6.9%, to $109.70.

Retailer Jones Apparel (JNY) swung to a fourth-quarter loss of $269.5 million, or $2.51 a share, compared with a year-ago profit of $55.7 million, or 48 cents a share. Excluding items, Jones earned 53 cents a share and beat the Thomson First Call consensus of 46 cents a share. The stock was off 3 cents, or 0.1%, to $34.13.

Crude futures eased following the latest weekly inventory report from the Energy Department. Lately, the near-month contract was down 58 cents at $58.48 a barrel. Natural gas was rising 4 cents to $7.41 per million British thermal units.

Last week, crude inventories decreased by 600,000 barrels. Distillate supplies fell by 3 million barrels, while gasoline stocks slipped by only 2 million barrels.

Metals prices firmed, with gold gaining $7.70 to $676.20 an ounce and silver higher by 17 cents at $14.09 an ounce.

Overseas, London’s FTSE 100 was up 0.3% at 6399, and Frankfurt’s Xetra DAX was adding 0.8% to 6949. Tokyo’s Nikkei gained 0.7% to 17,752. Hong Kong’s Hang Seng rose 0.4% to 20,210.

Days of Frenzy in the Energy Pits

It had been a rather uneventful workday for Ray Carbone, a 47-year-old oil and gas trader who owns Paramount Options, a small energy commodities trading firm in New York. Perched on the outer edge of the options pit at the New York Mercantile Exchange—one of six arenas on the floor where traders bellow and gesture wildly to move their wares—Carbone was biding his time. There had been a sharp decline in oil prices the previous day, refusing to break $60 a barrel for the third straight session. Other traders had started taking short positions, but Carbone remained stubbornly long on it for himself and his clients.

But suddenly, at about 2 p.m. on Feb. 8, the lull gave way to a price explosion as the market rallied. In the half-hour preceding the closing bell, crude prices surged by $2 a barrel, as energy traders piled back into the market. The news was good for Carbone, who learned later that the impetus for the 3% burst was news of a fire at an Occidental Petroleum (http://www.businessweek.com/ticker/) field in California, which would affect supplies.

“Good result today,” says Carbone. “I’m a believer in crude because I’m a believer in Asian demand and demand in this country. When we were down [earlier this year] I started to doubt my instincts, but we’re back.” Up and Down

These days, energy prices are exhibiting extraordinary volatility. Prices are jostled by big-picture factors like ongoing geopolitical tensions threatening to disrupt supply, the booming Chinese and Indian economies boosting demand, and OPEC’s mysterious machinations as well as shorter-term blips like unusually warm winter weather patterns and short-term production hiccups. Add to these factors the rapid movements of new energy market players—speculators like banks and an estimated $1.5 trillion hedge fund industry intrigued by commodities—which tend to exaggerate price movements. With nearly 180 funds focused on energy commodities, the entry of these new forces has helped make energy prices even more sensitive.

The results of each day’s session ripple rapidly throughout the world economy. No sector is untouched by energy prices: oil producers and refiners who invest billions to explore, airlines nervous about jet-fuel prices, auto companies who must adjust models rapidly to survive, and retailers like Wal-Mart Stores (http://www.businessweek.com/ticker/) keen to know how deeply its shoppers will be dunned at the gas pump.

The clearinghouse for much of this buying and selling is the trading pit at the New York Mercantile Exchange, the largest physical commodities exchange in the world. Oil contracts are also traded through the international Intercontinental Exchange (ICE) in London, as well as electronically 24 hours a day. Traders like Carbone sit at the front lines of these movements in the global oil market, battling price gyrations to turn a profit for clients and their firms. Here in the pit, the dull moments are many, but they never last long. Feb. 7: A Long, Cold Day

Wednesday, Feb. 7 begins at 16 degrees in Manhattan, and an icy northwest gale makes it feel subzero. The bitter cold isn’t just chilling the traders barreling into the New York Merc before the 9 a.m. bell, it also influences prices. Two weeks of freezing temperatures in the northeastern U.S. have helped oil prices rally from a lull in January, an unusually balmy month.

Carbone has been inside since 8:30 a.m. Later this morning, the weekly data on U.S. oil inventories will be released, promising an exciting day on the floor. Wearing a simple blue-and-green jacket with “Paramount” lettering on the back, he’ll be shoulder-to-shoulder in the options pit, working for eight of his clients, including banks, oil companies, and funds. Carbone trades primarily in natural gas and the crude benchmark product, West Texas Intermediate (WTI) oil.

The previous few days hadn’t been so eventful.

Jim Cramer’s Stop Trading! Buy NYSE

The huge TXU (TXU) buyout is a “perfect” deal that signals all utilities are potential takeout targets, Jim Cramer said on TheStreet.com TV’s http://www.thestreet.com/video/cramermarketupdates/10340899.html Monday.

“If you look at what these utilities are doing, it’s rather remarkable that they generate so much capital,” he told Gregg Greenberg, the host of Wall Street Confidential. “We’re in kind of an unregulated period” where they are able to keep raising rates. And utilities, with their strong cash flows, are enticing targets for firms eager for cash flow generating companies.

Cramer said he is “amazed at how eager” the private-equity firms are to put money to work. “It’s as if, if they find a target that’s big, they’re going to take it,” he said.

While Kohlberg Kravis Roberts’ $25.1 billion purchase of RJR Nabisco “was way too big vs. the money then,” Cramer said “this deal’s not big.”

“There will come a time when you look at a TXU and say they didn’t make a lot of money on that deal,” he said. “I don’t think they will make a lot of money on TXU.”

But in the end, Cramer said the private-equity firms are looking for consistent cash flows. “Whatever business has consistent cash flows is going to be a target because these companies don’t get rewarded in this market,” he said.

Against the view of the public market on utilities, “these companies don’t borrow nearly as much as they used to” and they have “giant cash flows,” Cramer said.

“This company is going to be a vehicle to go buy a lot of the utilities,” he continued. “This entity is going to be the consolidator, which is why I think people should get behind this deal.”

Moreover, private-equity firms need to put money to work in “big tranches,” Cramer said. Although they could’ve done 10 small deals, that’s “much more work,” which is why “this deal is so perfect,” he said.

UK Feb consumer confidence index down 1 point to -8 - GfK/NOP

LONDON (AFX) - Consumer confidence fell slightly in February as Britons became more pessimistic about the UK’s general economic situation, a leading pollster found today.

In its monthly survey, GfK/NOP said its main headline consumer confidence index fell one point to -8 from -7 in January, whereas analysts polled by AFX News were not expecting any change in the index.

Although three out of the five subindices within the indicator fell, UK consumers found some comfort in the fact that the Bank of England did not raise rates in February, said Carol Bernasconi, divisional director at GfK/NOP.

“This month consumers are much more optimistic about their personal finances compared with the past year. This is probably a result of interest rates remaining the same this month despite rumours that they would increase again,” she said.

However, past rate hikes are being felt, as “again for the second month in a row the ‘now is a good time to save index’ has recorded an increase, indicating that people are being cautious in the current economic climate,” Bernasconi said.

The major purchases measure slumped 6 points to +4, while the ‘now is a good time to save’ index rose one point to +35.

Views on the general economic situation of the country during the last 12 months have seen a drop of two points, down to -33. There was also a small drop in expectations for the general economic situation during the next 12 months, with the index falling by one point to -21.

The rises in the subindices came in personal household finance views. The index measuring changes in personal household finances rose three points, leaving it at 0, while the index for household finances over the next year rose one point to a score of +10.

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Bernanke urges action on budget deficits

WASHINGTON (AP) - Federal Reserve Chairman Ben Bernanke told Congress on Wednesday that the administration and federal regulators are closely monitoring financial markets in the wake of the biggest sell-off in stock prices in more than five years but so far the markets appear to be “working well.”

Bernanke said there did not appear to be a “single trigger’ to Tuesday’s big drop, which saw the Dow Jones Industrial average fall by 416.02 points.

Testifying before the House Budget Committee, Bernanke also said there had been no major change in the outlook for the economy, reiterating that the Fed expects “moderate growth” this year.

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