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U.S. stocks give up some gains after Bernanke speech, awaits news on borrowers from Bush

U.S. stocks give up some gains after Bernanke speech, awaits news on borrowers from Bush

Wall Street gave up some of its early gains Friday after investors were disappointed that Federal Reserve Chairman Ben Bernanke did not indicate that a cut in the benchmark federal funds rate was imminent.
Bernanke, speaking at a Fed meeting in Jackson Hole, Wyoming, said the central bank will "act as needed" to prevent the credit crisis from hurting the national economy, according to prepared remarks.
The major indexes, up sharply on optimism about a rate cut before Bernanke's speech, pulled back but were still up on an expected announcement by President George W. Bush of a plan to help borrowers facing trouble paying their mortgages.
The Dow Jones industrial average, up well over 100 points in early trading, was up 76.57, or 0.58 percent, at 13,315.30.
Broader stock indicators also rose. The Standard & Poor's 500 index rose 12.58, or 0.86 percent, to 1,470.22, and the Nasdaq composite index rose 22.06, or 0.86 percent, to 2,587.36.
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 Bush's and Bernanke's speeches, investors also digested data to discern how much the housing slump and credit problems are dragging on the broader economy.
Economic news, as Bernanke indicated Friday, appeared less relevant than normal again as investors kept their focus on upheaval in the credit market. 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.
The Commerce Department also said orders to factories jumped by 3.7 percent in July, even better than the 3.3 percent increase that had been expected. The increase, which followed three months of modest gains, followed an 11 percent jump in demand for transportation goods, including the biggest increase in orders for cars in more than four years.
Also, the Chicago purchasing manager's index, rose to 53.8 in August from 53.4 in July.


Updated : 2021-05-15 06:56 GMT+08:00