Stocks continued to rally in volatile trading Friday as investors breathed a collective sigh of relief after Fed Chairman Bernanke said the Fed was willing to do what it takes to stabilize the recovery.
The Dow Jones Industrial Average was up more than 100 points, or over 1 percent, led by DuPont , Alcoa and Caterpillar, after struggling along the 10,000 line earlier. This came after the blue-chip index lost nearly 75 points in the previous session and logged its first finish below 10,000 since early July.
The S&P 500 and the Nasdaq also gained. The CBOE volatility index, widely considered the best gauge of fear in the market, fell below 26.
Fed Chairman Ben Bernanke said the Fed is ready to do what it has to help strengthen the recovery in remarks at the Fed's annual symposium on the economy in Jackson Hole, Wyoming.
Bernanke's comments helped assuage market fears over the recovery.
"The measured approach he's taking is a healthy one," said Mike O'Rourke, chief market strategist at BTIG in New York. "It's not the type that's going to supercharge the markets and help equity returns in the near term. But it will help build the foundation for the future and a steady recovery going forward."
Earlier, St. Louis Fed President James Bullard told CNBC that he doesn't see a double dip— he thinks growth will steady towards the end of the year and get back to normal in 2011.
Hewlett Packard fell after the company raised its bid for 3Par to $30 a share, trumping the latest offer from Dell . 3Par shares soared more than 20 percent.
Intel shares rebounded following an initial drop after the tech bellwether warned that third-quarter earnings would likely fall short of expectationsamid weak PC demand in "mature markets."
In addition, the PC maker is likely to announce a deal with German chipmaker Infineon over the weekend. At least two brokerages cut their price targets on the stock — one to $20 and the other to $25.
Boeing once again delayed delivery of its first 787 Dreamliner by several weeks, citing a delay in the availability of a Rolls-Royce engine needed for the final phase of flight testing. But shares of the aerospace giant were higher.
Today's economic data were a mixed bag.
The University of Michigan and Reuters reported their gauge of consumer sentiment rose to 68.9in a final August reading from 67.8 in July but still came as a disappointment as economists had expected the gauge to rise to 69.6.
Second-quarter gross domestic product rose at a 1.6 percent rate, a downward revision from the previously reported 2.4 percent but ahead of the 1.3 percent economists had expected.
Another recall from Toyota: The automaker said it will recall 1.3 million Corolla and Matrix cars in the U.S. and Canada due to a defect with engine controls that causes the cars to stall.
In addition, Ford Motor is recalling about 575,000 Windstar vansin 21 cold-weather U.S. states and Canada because of the possibility that the rear axle may fracture due to corrosion, according to federal regulators. But shares of the automaker were higher.
Tiffany shares fell despite a solid earnings report from the high-end jeweler and an upbeat outlook. Brokerage Jefferies cut its price target on the luxury retailer to $55 from $61.
J.Crew shares tumbled after the clothing retailer posted earnings outlooks for the third quarter and full year that were below expectations.
Novell shares rose slightly even after the tech firm reported a nearly 6 percent drop in profit. S&P Equity lowered its rating on the firm to "sell" from "hold."
Investor Carl Icahn increased his stake in Motorola to 10.4 percent.
Oil climbed above $73 a barrelwhile gold prices gained above $1,230 an ounce.
On Tap For Next Week:
MONDAY: Personal spending & income; Fed's Bullard speaks; Warren Buffett's 80th birthday
TUESDAY: S&P/Case-Shiller home price index; consumer confidence index, FOMC minutes
WEDNESDAY: August auto sales; weekly mortgage applications; Challenger job-cut report; ADP employment report; ISM mfg index; construction spending; weekly oil inventories; Fed's Fisher speaks; Apple event
THURSDAY: August chain store sales; weekly jobless claims; productivity and costs; factory orders; pending home sales
FRIDAY: August jobs report; Fed's Lockhart speaks; ISM services index
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