Bernanke, Bush Boost Stocks
Updated from 4:23 p.m. EDT
Stocks in the U.S. rallied Friday after Federal Reserve Chairman Ben Bernanke addressed the current subprime mess and President Bush moved to offer federal help to mortgage borrowers.
The Dow Jones Industrial Average jumped 119.01 points, or 0.9%, to 13,357.74, led by a 3.4% jump in shares of Home Depot (HD). The S&P 500 added 16.35 points, or 1.12%, at 1473.99, and the Nasdaq Composite rose 31.06 points, or 1.21%, to 2596.36.
While the major averages finished the week nearly unchanged, the market logged its first winning month since May. The Dow added 1.1% in August, the S&P 500 climbed 1.2%, and the Nasdaq jumped 2%.The gains came after a speech from Bernanke on housing and monetary policy in Jackson Hole, Wyo., and remarks from President Bush encouraging the use of Federal Housing Administration insurance. In his speech, Bush noted that the subprime crisis is relatively modest compared with the entire U.S. economy, but he urged mortgage holders to refinance and count on the FHA if they become delinquent on adjustable-rate loans. The president, however, emphasized that it is not the government's position to provide a wholesale bailout to all borrowers. He also promised to penalize predatory lenders. "That's not really the answer to the subprime issue that's out there," said Robert Pavlik, chief investment officer with Oaktree Asset Management. "Too many people have bought homes that they can't afford. It's hard to protect people from themselves forever. There's a strong reaction to this proposal, but this isn't the answer."
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV