Bernanke, Bush Boost Stocks

"He isn't making any commitments to any move, which is what the market was really looking for," said Mendelsohn. "He did say we could see this spread further into the economy, which was unsettling to the market. Bernanke views this crisis as worrisome, and he basically said the Fed is not sure how big this problem will grow."

Breadth was strong for a second straight session. On the New York Stock Exchange 2.74 billion shares changed hands, as advancers topped decliners by a 4-to-1 margin. Volume on the Nasdaq reached 1.58 billion shares, with winners outpacing losers nearly 3 to 1.

Several economic reports were also in the spotlight. The Commerce Department said personal income rose a better-than-expected 0.5% last month, compared with a 0.4% rise in June. The core deflator -- a key Fed inflation gauge -- increased a mere 0.1%, and the year-over-year rate remained at 1.9% for the second straight month.

Elsewhere on the economic docket, the Chicago Purchasing Managers' index unexpectedly rose to a reading of 53.8 from 53.4, slightly higher than the consensus. The University of Michigan's consumer sentiment index, on the other hand, fell to a worse-than-expected reading of 83.4 in August from 90.4 last month.

U.S. Treasuries pared losses following the economic releases and the speeches from Bush and Bernanke. The 10-year bond was off 4/32 in price, pushing the yield to 4.53%. The 30-year note rebounded as well and was unchanged in price, yielding 4.83%.