In the broad market, the strongest sectors were basic materials, energy and technology. Only utilities finished in the red. Volume was thin once again, reaching 2.07 billion on the New York Stock Exchange and 1.55 billion on the Nasdaq.
For much of the early morning, prior to Bernanke, the markets were getting a lift from a report Friday from Germany's Bild newspaper that Bundesbank chief Jens Weidmann has mulled quitting several times over his opposition to the European Central Bank's plans for a new bond buying program.
The report stirred up hopes of a resignation that would likely indicate the ECB was moving closer to launching a program. Stocks then cut some gains after Standard & Poor's lowered Spain's Catalonia region to junk status.
Friday's economic data was mixed. The Chicago Institute of Supply Management reported that Chicago purchasing managers index fell a more than expected in August to 53 from 53.7 in July. Economists had expected a level of 53.5.The final read on the University of Michigan Consumer Sentiment Index for August came in at 74.3, better than the 73.6 economists were expecting. The Census Bureau released data showing that factory orders rose 2.8% in July, better than the rise of 1.9% that economists were expecting, and the biggest gain since July of last year. The FTSE in London was up 0.20% and the DAX in Germany was tacking on 0.88%, both steadily gaining ground even after another round of soft employment numbers out of Europe. The eurozone jobless rate hit a record high in July and the Italian unemployment rate remained elevated at a seasonally adjusted 10.7% last month. The Hong Kong Hang Seng index closed lower by 0.36% and the Nikkei in Japan finished down 1.60% after a disappointing report on the country's July industrial production numbers. Bernanke's speech got the biggest reaction in the bond, currency and gold markets. The benchmark 10-year Treasury rose 24/32, diluting the yield to 1.548%. The greenback weakened 0.64%, according to the dollar index. October crude oil futures rose $1.85 to settle at $96.47 a barrel and December gold futures soared $30.50 to settle at $1,687.60 an ounce as traders took Bernanke's speech as a clear sign that quantitative easing -- viewed as favorable for precious metals -- was on the way.