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U.S. stocks rise ahead of Bush, Bernanke speeches; Wall Street awaits signs of rate cut

U.S. stocks rise ahead of Bush, Bernanke speeches; Wall Street awaits signs of rate cut

Stocks opened sharply higher Friday as Wall Street awaited a plan by President George W. Bush to help borrowers facing trouble paying their mortgages. The advance also came ahead of a speech from Federal Reserve Chairman Ben Bernanke that Wall Street hopes will at least hint at a rate cut.
Investors were growing optimistic that months of mortgage troubles could be eased by Bush's expected 11:10 a.m. EDT (1510 GMT) announcement of plans to help struggling borrowers keep their homes. Mortgage lenders Countrywide Financial Corp. and Accredited Home Lenders Holding Co. surged ahead of his speech.
Bernanke begins speaking at 10 a.m. EDT (1400 GMT) at the central bank's annual conference in Jackson Hole, Wyoming, before the long Labor Day weekend. Though many market watchers say it's unlikely Bernanke will make any big waves in his speech today, investors will be listening closely for clues about future Fed moves.
Since the stock market started tumbling in late July on fears that problems in mortgage and corporate lending would lead to a credit freeze and hurt the economy, the Fed has injected tens of billions of dollars into the banking system and lowered its discount rate _ the charge on its loans to commercial banks. But the Fed has not yet said it will lower the benchmark federal funds rate, and Wall Street's uncertainty over what the central bank will do next has kept the markets volatile.
In early trading, the Dow Jones industrial average rose 118.44, or 0.89 percent, to 13,357.17.
Broader stock indicators also rose. The Standard & Poor's 500 index rose 15.65, or 1.07 percent, to 1,473.29, and the Nasdaq composite index rose 27.19, or 1.06 percent, to 2,592.49.
Bonds fell, with the yield on the benchmark 10-year Treasury note rising to 4.56 percent from 4.51 percent late Thursday. Bond prices move opposite their yields.
Before Bernanke's and Bush's speeches, investors also digested data to discern how much the housing slump and credit problems are dragging on the broader economy.
The Commerce Department reported on personal income and spending and the core personal consumption expenditures deflator, one of the Fed's preferred gauges of inflation. Personal incomes and spending edged up by 0.5 percent and 0.3 percent, respectively, and year-over-year core PCE stayed at 1.9 percent _ within the Fed's comfort range.
Later Friday morning, Chicago purchasing managers will release their monthly index of Midwest manufacturing, a precursor to next week's national manufacturing index from the Institute for Supply Management. Also, the University of Michigan will report on August consumer sentiment.
In corporate news, Dell Inc. reported after the market closed Thursday that its second-quarter profit soared 46 percent. The computer maker rose 27 cents to $28.73.
Countrywide rose 68 cents, or 3.5 percent, to $20.32, while Accredited Home rose $2.29, or 36 percent, to $8.60 rose ahead of Bush's speech.
The dollar was lower against most other major currencies, while gold prices rose.
Light, sweet crude rose 89 cents to $74.25 per barrel in premarket electronic trading on the New York Mercantile Exchange.


Updated : 2021-05-18 14:04 GMT+08:00