Comments by Bush, Bernanke aid stocks

NEW YORK - Wall Street closed out another erratic week with a big gain yesterday after investors took comments from President Bush and Federal Reserve Chairman Ben S. Bernanke as signs that Wall Street will not have to deal on its own with problems in the mortgage and credit markets.

Speaking at the Fed's annual conference in Jackson Hole, Wyo., Bernanke said the central bank would "act as needed" to prevent the credit crisis from hurting the national economy.

And Bush spoke about details of a plan to help borrowers facing trouble paying their mortgages.

"You've got all the speeches working for the market here," said Michael Church, portfolio manager at Church Capital Management in Philadelphia.

The Dow rose 119.01, or 0.90 percent, to 13,357.74. The Dow slipped 0.16 percent for the week; for the year, the blue chip index is up 7.2 percent despite the volatility of the last month.

Broader stock indicators also rose. The Standard & Poor's 500 index rose 16.35, or 1.12 percent, to 1,473.99. For the week, the S&P fell 0.36 percent, leaving it with a 3.9 percent gain for the year.

The Nasdaq composite index rose 31.06, or 1.21 percent, to 2,596.36. It gained 0.76 percent for the week, and is up 7.5 percent for the year.

Bond prices fell. The yield on the 10-year Treasury note, which moves inversely to its price, rose to 4.53 percent from 4.51 percent late Thursday. The U.S. bond market closed early ahead of the holiday weekend, and will be closed Monday along with the stock markets.

Since the stock market started tumbling in late July on fears that problems in mortgage and corporate lending would lead to a credit freeze and hurt the economy, the Fed has injected tens of billions of dollars into the banking system and lowered its discount rate, the charge on its loans to commercial banks. But the Fed has not yet said it would lower the benchmark federal funds rate, and Wall Street's uncertainty over what the central bank will do has kept the markets volatile. The Fed's next meeting is Sept. 18.

Bush's comments that the nation's economy can "weather any turbulence" in what he termed a period of transition for the financial markets appeared to help reassure investors. He outlined proposals to assist borrowers in trouble from a pullback in the housing market and credit problems.

Investors might harbor some concern about the start of September, typically a difficult month for the stock markets as investors return from vacations and reassess their holdings. The S&P 500 typically loses 0.7 percent in September and 0.6 percent when preceding an election year, according to the Stock Trader's Almanac.

The dollar was mixed against other major currencies yesterday, while gold prices rose.

Light, sweet crude oil settled up 68 cents at $74.04 a barrel on the New York Mercantile Exchange.

The Russell 2000 index of smaller companies rose 9.75, or 1.25 percent, to 792.86.

Japan's Nikkei stock average surged 2.57 percent, Hong Kong's key index jumped 2.13 percent, and China's Shanghai Composite Index rose 0.99 percent. Britain's FTSE 100 rose 1.47 percent, Germany's DAX index rose 1.57 percent, and France's CAC-40 rose 1.25 percent.