Bernanke suggestion stirs the markets

NEW YORK - The stock market keeps getting tossed around by the Fed.

Stocks opened lower Friday but reversed course after a letter surfaced from Federal Reserve Chairman Ben Bernanke suggesting there was room for the central bank to do more to help the economy.

"There is scope for further action by the Federal Reserve to ease financial conditions and strengthen the recovery," Bernanke wrote to California Rep. Darrell Issa, a Republican, in a letter obtained by the Wall Street Journal.

After starting the trading session down, the Dow Jones industrial average finished 100.51 points higher, at 13,157.97, its first gain all week. It was still the first losing week for the Dow since early July.

The Standard & Poor's 500 index rose 9.05 to 1,411.13 but also snapped a six-week winning streak. The Nasdaq composite index rose 16.38 to 3,069.79, ending five straight weeks of gains.

In a typically slow August, without much else to influence trading, investors have grasped for hints about what the Fed might do.

Bernanke's letter was in response to questions from Issa, the head of the House oversight committee, who had asked whether it was premature for the central bank to consider additional stimulate steps.

Some analysts thought it strange that the market moved so decisively on just an inkling about what the Fed chairman might be thinking.

"What's new about what came out?" said Ann Miletti, senior portfolio manager at Wells Fargo Advantage Funds in Menomonee Falls, Wis. "I guess the markets are dependent on having some commentary about the macro economy every single day."

In economic news, U.S. durable goods orders, excluding the volatile transportation category, fell in July, according to the Commerce Department. Down for the fourth time in five months, durable goods are an important measure of economic health because those orders show whether businesses are willing to spend to expand or improve.