Dow Jones closes at record high

Investor fears over future inflation have calmed

The Dow Jones Industrial Average index closed at a record high after remarks from Fed chairman Ben Bernanke that inflation worries may be easing.

The comments helped send the Dow Jones to an all-time high close, as investors drew confidence from the comments.

At close the Dow gained 87.01 points, or 0.69%, to end at 12,741.86.

The rally included the technology and financial services sectors among the gainers, and was also boosted by strong earnings from Applied Materials.

Shares in the firm, the top supplier of equipment for making microchips, rose 3.9%, or 70 cents, to $18.89 on the Nasdaq market after the company posted a profit that topped expectations.

'Sanguine comment'

"Recent readings on inflation have been encouraging," Mr Bernanke said in testimony to the Senate Banking Committee.

Continued economic growth meant the US was now "much closer" to reaching full employment, he added.

"This was a very sanguine comment on inflation, and that was very encouraging," said Hugh Johnson, analyst at Johnson Illington Advisors.

"It says to me that the Fed is not likely to change interest rates any time soon."