Stocks Close Flat After Bernanke Speech - TheStreet

NEW YORK (

TheStreet

) -- Stocks closed mixed but largely flat Monday, after

Federal Reserve

Chairman Ben Bernanke indicated that the central bank expected a slow pace of economic recovery and plans to maintain low rates for an extended period.

The

Dow Jones Industrial Average

added 1 point to close at 10,390. The

S&P 500

lost 3 points, or 0.3%, at 1103, while the

Nasdaq

declined 5 points, or 0.2%, at 2190.

Utility and Telecom stocks helped lead advancers on the day.

Verizon

(VZ) - Get Report

and

AT&T

(T) - Get Report

joined

Boeing

(BA) - Get Report

as Dow leaders in the green.

Exelon

(EXC) - Get Report

and

Duke Energy

(DUK) - Get Report

each advanced 1.7% and 1.4%.

>>See 2 Dividend Stocks to Own for 2010

After the market close,

FedEx

(FDX) - Get Report

shares jumped over 3% after the package-shipping behemoth boosted its second-quarter earnings outlook. FedEx now expects to earn $1.10 a share after earlier forecasting a range of 65 cents to 95 cents a share.

Bernanke's speech to the Economic Club of Washington Monday signaled no new major policy shifts ahead of a meeting by the Federal Open Market Committee later this month. Repeating prior thoughts,

Bernanke said that the U.S. economy is recovering, though it will likely see only moderate expansion next year as high unemployment and tight credit remain issues. He also stated that inflation should remain subdued, and gave no hints about when the Fed plans to increase rates or unwind initiatives used to prop up the economy during the downturn.

Friday's better-than-expected November jobs report suggested a gradually improving employment picture, which bolstered the U.S. dollar and increased market concern about the prospect of higher interest rates.

Before Monday's speech, Deutsche Bank economist Joseph LaVorgna suspected that the Fed is less influenced by the direction of unemployment rate than the actual level. At 10%, it remains uncomfortably close to the post-World War II record high of 10.8% in 1982.

"The linking of the 'extended period' for the zero interest rate policy to the unemployment rate, which is likely to stay elevated for some time, will likely keep the risks of a Fed tightening at bay at least into

the first quarter of next year," LaVorgna said.

The greenback slipped sharply after the speech, though the Dollar Index recently declined by 0.1%.

Gold prices

recovered from session lows and reversed after Bernanke's words. The most actively traded February contract shed $5.50 to settle at $1,164 after at one point losing over $25 earlier in the session.

Gold miners

Barrick Gold

(ABX)

,

Yamana Gold

(AUY) - Get Report

and

Goldcorp

(GG)

, which were pressured by lower gold prices, shed 0.6%, 2.2% and 2.2% each.

Barclays Capital Analyst Suki Cooper said earlier that since speculative interest in gold has soared recently, the liquidation of loosely-committed long contracts will drag on gold prices. Once this plays out, however, Cooper sees gold prices turning higher.

"Although we would not rule out further corrections, external drivers such as concerns regarding the dollar and inflation are likely to keep longer-term interest in gold favorable, as reflected in the steady but elevated gold exposure held through exchange-traded products," Cooper said.

Oil also

traded lower, with the January crude contract settling at $73.93, or down $1.54 a barrel.

Overseas, Hong Kong's Hang Seng declined 0.8%, and Japan's Nikkei increased 1.5%. The FTSE in London dropped 0.2% and the DAX in Frankfurt dipped by 0.6%.

Fertilizer companies commanded attention during Monday's trading session as

CF Industries

(CF) - Get Report

hiked its bid for long-time target

Terra Industries

(TRA)

.

Meanwhile, shares of

Potash Corp.

(POT)

and

Agrium

(AGU)

drove higher by 3.5% and 4.8%, respectively, on analyst upgrades.

Shares across the solar sector brightened as

Barclays lifted ratings on three companies to overweight. Shares of

Sunpower

(SPWRA)

were up by 9.6%,

Suntech Power

(STP)

gained 10.8% and

JA Solar

(JASO)

rose 12.5%.

In morning news, the long-term cost of the government's Troubled Asset Relief Program is now expected to be about $141 billion, or

$200 billion lower

than initially forecast, according to

The Wall Street Journal

.

Intel

(INTC) - Get Report

is delaying the release of its Larrabee graphics chip. Its stock fell 9 cents, or 0.4%, at $20.37.

Nvidia

(NVDA) - Get Report

and

Advanced Micro Devices

(AMD) - Get Report

, the two leaders in the advanced graphics chip market, were the biggest beneficiaries of the news, as shares jumped 12.8% and 8.4%, respectively.

Online video delivery company

Akamai Technologies

(AKAM) - Get Report

also will be watched by investors, after the company

boosted fourth-quarter outlook

. The shares were bid higher by 1.6% higher at $25.37.

Shares of

MetLife

(MET) - Get Report

rose 1% higher on Monday. The insurance provider

raised its fourth-quarter earnings expectations

, citing higher premiums and fees.

Financials lagged on Monday, with the KBW Bank Index down by 1.6%. Still, earlier in the day, Bank of America Merrill Lynch analyst Kenneth Bruch

upgraded

American Express

(AXP) - Get Report

,

Capital One Financial

(COF) - Get Report

and

Discover Financial Services

(DFS) - Get Report

to neutral.

A Fed report also showed that U.S. consumer credit fell by an annual rate of $3.5 billion in October, far less than the $9.3 billion slide forecast by analysts surveyed by Thomson Reuters.

-- Written by Melinda Peer and Sung Moss in New York

.