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Bernanke rally stays in place

Friday, August 31, 2012 - 02:02

Aug 31 - Summary of business headlines: Stocks climb as Federal Reserve Chairman Ben Bernanke keeps stimulus on the table; Consumer sentiment hits three-month high but worries linger; Business growth slows in the Midwest; Facebook sinks to new low. Conway G. Gittens reports.

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PLEASE NOTE: THIS EDIT CONTAINS CONVERTED 4:3 MATERIAL August is the third up month in a row for stocks and Friday helped as the U.S. central bank signals it is still willing to boost economic growth through unconventional measures. That sent stocks higher across the board though gains were stronger earlier in the day. But the Dow was down for a second week in a row, as was the Nasdaq. In a long awaited speech, Federal Reserve Chairman Ben Bernanke said the Fed was ready to add more stimulus in order to deal with an unemployment rate that is stubbornly high, but stopped short of providing any new clues on the size or timing of quantitative easing or QE3. Many on Wall Street, like Yelena Shulyateva of BNP Paribas, had this interpretation. SOUNDBITE: YELENA SHULYATEVA, U.S. ECONOMIST, BNP PARIBAS (ENGLISH) SAYING: "We do think the Fed will act at their September meeting and the chairman was clearly not going to announce any policy action in his speech, it was not his intention, this is the committee decision and we expect them to announce further QE at the September meeting." Consumer sentiment touched a three-month high in August as shoppers feel better about their personal fortunes. But the Thomson Reuters/University of Michigan survey also shows Americans remain worried about the future. In other economic data: growth in the Midwest section of the country slowed slightly this month, despite a gain in new orders. The debate over Facebook rages on as the stock closes at new low. $18 a share, more than half of the $38 IPO price, as Wall Street firms cut their price targets on the social network. Turning to Europe, investors look ahead to a meeting of the European Central Bank on September 6th, but knowing the Fed is standing by helped lift most markets across the Atlantic. Conway Gittens, Reuters

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Bernanke rally stays in place

Friday, August 31, 2012 - 02:02