In his semiannual report to the Senate Banking Committee, Bernanke predicts the economy is likely to keep contracting in the first six months of 2009. But he also says "there is a reasonable prospect" the recession will end this year. He warns that a recovery will require getting credit and financial markets to operate normally.

The market is up a day after another sharp drop in stocks that left the Dow Jones industrial average and the Standard & Poor's 500 index near 12-year lows.

In midday trading, the Dow is up 74 points at 7,189. The S&P; 500 index is up 10 at 753 and the Nasdaq composite index is up 20 at 1,407.