The Dow Jones industrial average ended another turbulent week with a strong gain Friday after Federal Reserve Chairman Ben Bernanke said the US was headed for long-term economic growth. It was the first winning week in a month. Trading volume was light, a sign that many traders were leaving New York ahead of Hurricane Irene. The storm is expected to reach the region late Saturday night. A spokesman for the New York Stock Exchange said trading is expected to open as usual Monday. Bernanke announced no new economic stimulus measures during his speech at a conference in Jackson Hole, Wyoming, as some investors had hoped. He did leave open the possibility of more action if another recession looks likely. Indexes fell sharply as the speech was released at 10 a.m. and it became clear that Bernanke was not promising additional support of the economy. The Dow Jones industrial average was down about 78 points shortly before the speech started and slumped as many as 220 points shortly after Bernanke started speaking. It recovered within an hour and stayed higher the rest of the day. The Dow Jones industrial average rose 134.72 points, or 1.2 percent, to close at 11,284.54. It was up 4.3 percent for the week after being down the past four. The Standard & Poor's 500 index rose 17.53, or 1.5 percent, to 1,176.80. It rose 4.7 percent for the week, its biggest gain since the week ended July 1. The technology-heavy Nasdaq composite index rose 60.22, or 2.5 percent, to 2,479.85. Boeing Co. rose 2.8 percent, the most of the 30 stocks that make up the Dow. Tiffany & Co. rose 9 percent, the most of any of the 500 stocks in the S&P index, after the luxury retailer raised its profit forecast for the year. In his speech, Bernanke focused on the long-term strengths of the US economy. He said they “do not appear to have been permanently altered by the shocks of the past four years.” That shot of optimism helped lift markets. “In the American economy, the only thing that's really lacking right now is confidence,” said David Kelly, chief market strategist at JPMorgan funds. “People who understand the limits of monetary policy also understand that the economy has what it takes to grow.” Other analysts said Bernanke's speech helped lift investor sentiment. Liz Ann Sonders, chief investment strategist at Charles Schwab, said Bernanke's speech was an “acknowledgement that the Fed is not out of tools and that they stand ready” to act if needed. Underscoring how fragile the US economic recovery is, early Friday the government said the nation's economy grew at an annual rate of just 1 percent in the April-June quarter, weaker than the government's first estimate of 1.3 percent. The report renewed concerns that the US might be headed for another recession. The Fed has said it plans to keep short-term interest rates low until mid-2013. Low rates on investments like bonds make higher-risk bets such as stocks more attractive. At last year's conference in Jackson Hole, Bernanke signaled the central bank would buy more government bonds to lower long-term interest rates. The government lowered its estimate for economic growth in the April-June quarter because of fewer exports and weaker growth in business stockpiles. That means the economy expanded at an annual rate of only 0.7 percent in the first six months of the year, the worst pace since the recession ended in June 2009.
