CLOSING BELL: August 31st: DJIA: 13,090.84 |UP 90.13 | +0.69%
OIL: $96.47, UP 1.85, +1.96%
GOLD: $1,687.60, UP 30.50, +1.84%
GASOLINE (US Avg): $3.829, UP .003
Herbert Lash, Reuters – Stocks and the euro rose on Friday after Federal Reserve Chairman Ben Bernanke kept the door open for future monetary easing, although he offered no clear signal of imminent action that markets had hoped for in a much-anticipated speech.
The euro and European shares rose as signs emerged of progress toward a deal to tackle the euro zone’s debt crisis.
The dollar dropped to an eight-week low against the euro and two-week low versus the yen after Bernanke said high unemployment is a “grave concern,” remarks that reinforced expectations for further stimulus to revive growth.
Bernanke told central bankers in Jackson Hole, Wyoming, that progress in bringing down U.S. unemployment was too slow and that the central bank would act as needed to strengthen the economic recovery.
Investors focused on what he had to say about monetary policy and the stagnation in the U.S. labor market.
Bernanke said the Fed had to weigh the costs and the benefits of further stimulus, but he also downplayed potential risks from unconventional policies. He argued the Fed’s asset purchases, known as quantitative easing, had been quite effective at boosting growth and fostering job creation.
“I think when he talks about ‘grave concern,’ that says it all. Further accommodation is coming, it’s just a question of how it manifests itself,” said Scott Graham, head of U.S. government bond trading at BMO Capital Markets in Chicago.
Read the rest of this article at Reuters here.
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