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Markets looking for another lifeline from the Fed

Markets back to hanging on the Fed's every word

Markets are looking for another handout from the Fed, so whatever Fed Chair Janet Yellen says or does not say Friday will be a big deal.

Stocks bounced back Thursday after a rough opening, with the ending the day less than a point higher, and the Nasdaq up 2 points. The Dow was off 24 points, but the small cap Russell 2000 was up nearly 1.3 percent.

St. Louis Fed President James Bullard was credited with the turnaround, when he said the Fed should consider continuing to buy bonds beyond the scheduled end of quantitative easing later this month, due to market turmoil.

"The market was looking for a lifeline. It found one in his comments," said Mark Luschini, chief investment strategist at Janney Montgomery. As for Yellen, he does not expect her to say anything new or stray from recent remarks.

Yellen speaks on economic opportunity at the Boston Fed's 58th Economic Conference Friday at 8:30 a.m., but she is not expected to take questions. The conference focus is on inequality of economic opportunity. Boston Fed President Eric Rosengren is also speaking there and will appear exclusively on "Squawk Box" at 7:30 a.m.

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Bullard, who can be hawkish, surprised markets with his comment that the Fed should continue to proceed with $15 billion a month in securities purchases, which has been pared back from an initial $85 billion program.