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Stocks rebound as investors digest Bernanke speech | ASHARQ AL-AWSAT English Archive 2005 -2017
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NEW YORK, (Reuters) – Wall Street stocks rebounded on Friday as investors digested Federal Reserve Chairman Ben Bernanke’s remarks about the economy and regained hope the door was still open for more monetary stimulus down the road.

Major indexes turned positive after initially extending losses as Bernanke failed to offer any concrete action for monetary easing in a speech at a central bank conference in Jackson Hole, Wyoming.

“He didn’t give the market the green light for QE3 — he also didn’t give the market the red light for QE3. By implying that inflation is viewed as not a concern, it leaves the possibility for something down the road,” said Kevin Caron, market strategist at Stifel, Nicolaus in Florham Park, New Jersey, referring to the Fed’s quantitative easing program.

Bernanke also said the central bank’s policy panel would meet for two days in September instead of the usual one to discuss any more stimulus. While expressing long-term optimism, Bernanke said the Fed found recent developments troubling, and saw a low inflation rate.

“He did say he expected the rate of inflation to be at or below 2 percent. That fact sets the stage potentially for more to come from the Fed in the future,” Caron said.

The Dow Jones industrial average was up 150.65 points, or 1.35 percent, at 11,300.47. The Standard & Poor’s 500 Index was up 17.77 points, or 1.53 percent, at 1,177.04. The Nasdaq Composite Index was up 53.76 points, or 2.22 percent, at 2,473.39.

Hopes for new stimulus helped spark a three-day rally earlier this week, though equities later sold off as expectations moderated.

Technology stocks led the advance, with Cisco Systems Inc Microsoft Corp and Intel Corp the top three gainers on the Dow.

Cisco shares were up 2.9 percent at $15.51, while Microsoft shares rose 3 percent to $25.32 and Intel Corp put on 2.1 percent to $19.82.

The S&P information technology index was up 2.5 percent, the best-performing sector on the S&P.

“We’re very oversold, so we’re getting some bounces,” said Lance Roberts, chief executive of Streettalk Advisors, an investment management firm in Houston.

Shares of property insurers rose after falling on worries about damage from Hurricane Irene. Travelers Cos Inc rose 0.6 percent to $48.25, while Allstate Corp shares gained 1.3 percent to $24.74, and Chubb Corp climbed 1.8 percent to $59.71.

As Irene bore down on North Carolina, tens of thousands of people evacuated and East Coast cities including New York braced for a weekend hit from the powerful

Tiffany and Co rose 7.7 percent to $67.95 after it raised its full-year profit outlook.

About three stocks rose for every one declining on both the New York Stock Exchange and the Nasdaq.