Stocks on Wall Street ended a poor week on a high note as investors found reassurance in Federal Reserve Chairman Ben Bernanke's vow to do whatever it takes to revive the shaky US economy.He said the central bank would act if "unexpected developments
Stocks on Wall Street ended a poor week on a high note as investors found reassurance in Federal Reserve Chairman Ben Bernanke's vow to do whatever it takes to revive the shaky US economy.
He said the central bank would act if "unexpected developments" caused the recovery to falter, but stopped short of saying what that would entail.
Earlier, the week was packed with disappointing economic data, which was capped on Friday with another sluggish reading on second-quarter growth and a third-quarter revenue warning from technology bellwether Intel.
The US Commerce Department cut its estimate for second-quarter growth to 1.6% – a sharp reduction from the previous estimate of 2.4%, but still not as bad as the 1.3% forecast of economists.
The Dow Jones Industrial Average vaulted 165.14 points, or 1.65%, to finish at 10150.65. The blue-chip index slumped to below the psychologically important 10,000 level on Thursday, which could have provided some motivation behind Friday's rally.
Intel gained 1.1% even after warning that weakening consumer demand for computers will hurt sales during the third quarter. Boeing rose 3% despite again delaying production for its 787 Dreamliner jet.
Data-storage company 3Par soared 25% as the bidding war for the company escalated. Hewlett-Packard raised its offer 11% above Dell's bid made only hours before.
Shares of Dell increased 1.2%, while H-P shares slipped 0.6%, making it the only Dow component in the red.
The Nasdaq Composite gained 1.65% to 2153.63, while the S&P 500 index rose 1.66% to 1064.59.
Investors noted that the 1040 level had provided support for the measure earlier in the session. Materials led the S&P 500's recent climb, while safer consumer staples lagged.
Other markets: Europe up, Asia mixed
US indexes tracked a rally in European markets. The Stoxx Europe 600 index rose 0.6% to 251.24 points. That trimmed its loss for August to 1.6% with two trading days left in the month.
The FTSE 100 index rose 0.9% to 5201.56, the French CAC 40 index advanced 0.9% to 3507.44 and the German DAX 30 index gained 0.7% to 5951.17.
Asian stock markets ended mixed Friday, helped by a major turnaround in Japan where stocks rebounded from losses amid stimulus hopes and potential government action to stem the rise in the yen.
Japan's Nikkei Stock Average rebounded from a 1% decline to end 1% higher at 8991.06, Australia's S&P/ASX 200 was up 0.3% to 4370.11 and Korea's Kospi Composite ended roughly flat at 1729.56.
Hong Kong's Hang Seng Index nudged 0.1% lower to 20,597.35, while the Shanghai Composite climbed 0.3% to 2610.74. India’s Sensex was 1.2% lower at 17,998.41.
Commodities: Oil up, gold down
Crude futures ended the week with a three-day rally. Light, sweet crude for October delivery settled up $US1.81, or 2.5%, at $US75.17 a barrel in New York. Brent crude on the ICE futures exchange was up $US1.63, or 2.2%, at $US76.65 a barrel.
Gold futures eased slightly. The most actively traded gold contract, for December delivery, was down $US1.50, or 0.1%, at $US1236.20 an ounce in New York.
Currencies: Dollar up, yen down
The US dollar gained against the yen and Swiss franc but held steady against the euro as demand for riskier assets picked up in the wake of Mr Bernanke's speech.
That helped the euro to recover from an earlier slide and benefited the New Zealand and Australian dollars, which gained 1.4% each against the dollar.
At the annual meeting of top central bankers held in Jackson Hole, Wyoming, Mr Bernanke said while the Fed was ready to support the faltering US recovery it hadn’t agreed on what would be a trigger for further action.
The euro was at $US1.2735, just slightly up from $US1.2729 late on Thursday. The dollar was at ¥85.30, up from ¥84.41.
The euro was at ¥108.63 from ¥107.44. The UK pound was at $US1.5515 from $US1.5535. The US dollar was at 1.0297 Swiss francs from 1.0233 francs.
