Stocks hit new daily highs Friday after Federal Reserve Chairman Ben Bernanke said the Fed is ready to jump in and help an economy that is “far from satisfactory.”
Stocks were already higher before Bernanke’s comments, but briefly gave up most of their gains after the release of his prepared remarks. As investors digested the speech, stocks bounced back above their early-morning peaks.
Investors have been watching to see whether the Fed will buy more bonds to further lower long-term interest rates.
Few expected him to announce new bond-buying on Friday. And Bernanke stopped short of committing the Fed to any specific move. But his comments that the Fed “should not rule out” new policies to improve the job market may have been enough to give investors confidence that the Fed will act if needed.
Also Friday, the Commerce Department said factory orders rose 2.8 percent in July, on surging demand for autos and commercial planes. However, orders for core capital goods — a key measure of investment spending — dropped 4 percent. That was its fourth decline in five months.
Investors seemed more focused on Bernanke’s comments and the overall higher factory orders, though.
The Dow Jones industrial average was up 139 points in late morning trading, to 13,140. The broader Standard & Poor’s 500 index rose almost 12 points to 1,411. The Nasdaq was up 23 points to 3,072.
Stocks rose in nine out of 10 industry groups in the S&P 500. Utility stocks declined slightly. Energy stocks had the biggest gain, up 1 percent.
All 30 stocks in the Dow rose.
Stocks in Europe were also higher. The German DAX was up six-tenths of a percent, and the CAC 40 in France rose a half-percent. The FTSE 100 in Britain was flat.
The dollar fell, with the euro rising to $1.260, and the Japanese Yen rising against the dollar to 78.32.
Oil prices rose to $95.52 per barrel on the New York Mercantile Exchange.