NEW YORK ( TheStreet) -- The major U.S. equity averages finished mixed on Monday as a downbeat speech by Federal Reserve Chairman Ben Bernanke knocked stocks off early highs.

Bernanke reiterated the central bank would keep the stimulus coming for the foreseeable future but spoke mostly of eurozone's issues and other headwinds to the U.S. economy's growth. He also said monetary policy was "no panacea" for getting the economy back on track and urged Congress and the White House to do more as well.

"Headwinds from slowing economic activity in Europe and ECB actions won't solve the problems," said Bernanke during the Q&A session after his presentation at the Economic Club of Indiana. "It will only provide time."

Prior to Bernanke's speech, stocks were roaring higher in morning trades as investors cheered data showing that economic activity in the manufacturing sector expanded in September.

The Dow Jones Industrial Average rose 78 points, or 0.58%, to close at 13,515. The blue-chip index, which booked its biggest gain since Sept. 13, started the day up by more than 11% in 2012. The session peak was 13,598.

Breadth was heavily positive with advancers outpacing laggards 26 to 4. The most prominent percentage gainers were American Express ( AXP), Bank of America ( BAC), Coca-Cola ( KO), IBM ( IBM), JPMorgan Chase ( JPM), Travelers Cos. ( TRV), and United Health ( UNH).

3M ( MMM) shares rose after the company agreed to acquire ceramic products maker Ceradyne ( CRDN) for around $860 million. 3M shares tacked on 0.88% while Ceradyne's stock jumped 43%.

Dow decliners included Caterpillar ( CAT), Cisco ( CSCO), Walt Disney ( DIS), and Microsoft ( MSFT), which was downgraded at RBC.

The S&P 500 gained less than 4 points, or 0.27%, to settle at 1444, while the Nasdaq dipped nearly 3 points, or 0.09%, to finish at 3114.

Earlier in the session, the S&P 500 hit a high of 1457 and the Nasdaq reached 3147.

Gainers outnumbered losers by a 1.6-to-1 ratio on the New York Stock Exchange and 1.3-to-1 on the Nasdaq. Volume totaled 3.49 billion on the Big Board and 1.76 billion on the Nasdaq.

The strongest sectors in the broad market were financials, energy and basic materials. The only groups in the red were conglomerates and technology.

The market began the first day of the final calendar quarter of 2012 with strong momentum after the Institute for Supply Management reported its manufacturing index jumped to 51.5 in September from 49.6 in August, indicating a return to expansion after shrinking for three straight months. Economists were expecting yet another month of contraction with a read of 49.7. The Employment Index in the report increased by 3.1 percentage points to 54.7.

The rise in the US ISM manufacturing index to a four month high "will boost hopes that some of the recent slowdown in economic growth was just a summer phenomenon," said Paul Dales, senior U.S. economist at Capital Economics.

Dales continued: "But we would warn against getting too carried away. At 51.5, the headline index is still consistent with annualized GDP growth of no more than 1.5%-2.0%. And even the employment index is consistent with flat manufacturing payrolls. The upshot is that the weak global economy and growing concerns over the domestic fiscal cliff will prevent a major rebound in U.S. economic growth."

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