Though Bernanke, speaking in Jackson Hole, Wyoming, dashed some hopes for a signal of quick action, his comments bolstered bets that the central bank was closer to providing more stimulus for an economy that is close to stalling. Stocks had been flat for much of the week ahead of Bernanke’s speech, though expectations of additional stimulus from the Fed helped the market this month. All three indexes posted gains for August. “I think the debate is how strong growth is and how aggressive the Fed is going to be,” said Giri Cherukuri, head trader at OakBrook Investments LLC, in Lisle, Illinois. “Hopefully the economy will just get better on its own, but I think the Fed is saying they’re going to be there and is trying to tell the market that they have some power to help things along.” Energy and materials shares were among the best performers, with the S&P energy index .GSPE up 0.9 percent and the S&P materials index .GSPM up 1.1 percent. The Fed’s next policy meeting is in mid-September, and many analysts are looking to it for a decision on a third round of quantitative easing. The Dow Jones industrial average .DJI was up 90.13 points, or 0.69 percent, at 13,090.84. The Standard & Poor’s 500 Index .SPX was up 7.10 points, or 0.51 percent, at 1,406.58. The Nasdaq Composite Index .IXIC was up 18.25 points, or 0.60 percent, at 3,066.96. Even with the advance, each of the major indexes posted a second straight weekly decline. The Dow was down 0.5 percent for the week, while the S&P 500 was down 0.3 percent and the Nasdaq was down 0.1 percent. For the month, the Dow rose 0.6 percent, the S&P 500 gained 2 percent and the Nasdaq climbed 4.3 percent, its best monthly performance since February. Volume was light but above the low levels of earlier in week. The four other days this week were among the five lowest for volume all year. The day’s volume traded on the New York Stock Exchange, the Nasdaq and the Amex, was about 5.3 billion shares. The year-to-date average is about 6.6 billion. Investors are looking ahead to the European Central Bank meeting on Thursday that is expected to take pressure off highly indebted countries. Comments from ECB Executive Board member Benoit Coeure rekindled expectations for central bank action. Among the day’s best performing stocks, SAIC Inc (SAI.N) was up 3.4 percent at $12.21 after the computer contractor reported a drop in second-quarter profit and said it would split its business into two independent public companies. On the data front, consumer sentiment climbed more than expected to a three-month high, while the Institute for Supply Management-Chicago’s index of Midwest business activity fell in August to 53.0 from 53.7 in July.
The euro and European shares rose as signs emerged of progress toward a deal to tackle the euro zone’s debt crisis. The dollar dropped to an eight-week low against the euro and two-week low versus the yen after Bernanke said high unemployment is a “grave concern,” remarks that reinforced expectations for further stimulus to revive growth. Bernanke told central bankers in Jackson Hole, Wyoming, that progress in bringing down U.S. unemployment was too slow and that the central bank would act as needed to strengthen the economic recovery. Investors focused on what he had to say about monetary policy and the stagnation in the U.S. labor market. Bernanke said the Fed had to weigh the costs and the benefits of further stimulus, but he also downplayed potential risks from unconventional policies. He argued the Fed’s asset purchases, known as quantitative easing, had been quite effective at boosting growth and fostering job creation. “I think when he talks about ‘grave concern,’ that says it all. Further accommodation is coming, it’s just a question of how it manifests itself,” said Scott Graham, head of U.S. government bond trading at BMO Capital Markets in Chicago. The Dow Jones industrial average was up 107.70 points, or 0.83 percent, at 13,108.41. The Standard & Poor’s 500 Index was up 8.80 points, or 0.63 percent, at 1,408.28. The Nasdaq Composite Index was up 20.14 points, or 0.66 percent, at 3,068.85. In Europe, the FTSEurofirst of top regional shares closed up 0.5 percent at 1,082.93 in thin trade, erasing the previous session’s losses and ending the month almost flat. MSCI’s all-country world equity index .MIWD00000PUS rose 0.6 percent to 322.32. “The basic problem for investors at this point in time is that everyone knows the Fed considers the current economic performance to be unacceptable, but is it unacceptable enough for them to act today or tomorrow before the election?” said Cary Leahy, senior managing director at Decision Economics in New York. “I don’t think this speech answers that question,” he said. Bernanke said the Fed would provide additional policy accommodation as needed, a remark seen as a somewhat weaker hint of policy easing than the minutes of the Fed’s last policy meeting had delivered. “The market was looking for him to not throw any cold water on the prospects for QE and he didn’t throw any cold water on it,” said John Canally, investment strategist at LPL Financial in Boston. “The timing is a little bit iffy, but he didn’t come out of the box saying that there has been substantial and sustainable improvement in the economy. Because he didn’t do that, I think it’s just a matter of time,” Canally said. The August payrolls report is due next Friday, days before the next meeting of the Federal Open Market Committee on September 12-13. Many analysts say there is a strong possibility the Fed will announce a third round of bond-buying at the meeting. The euro was up 0.6 percent at $1.2576, while the U.S. dollar index .DXY was down 0.6 percent at 81.218. Investors have hoped that more monetary easing would revive economic growth and support demand for oil, for example. was up $1.61 at $114.26 a barrel, while U.S. crude gained $1.85 to settle at $96.47 a barrel. U.S. Treasuries yields fell to their lowest levels in three weeks. Treasury prices rose. The benchmark 10-year U.S. Treasury note was up 16/32 in price to yield 1.5722 percent.