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."

The strong read was overriding the Census Bureau's report that construction spending fell 0.6% in August. Economists had expected construction spending to rise 0.4%.

Now that the world's central banks have committed to significant bond-buying programs, investor attention is turning to third-quarter reporting season, which kicks off on Oct. 9. The current expectation is for a year-over-year decline of 2.1% in earnings for the S&P 500, according to data from Thomson Reuters.

"It will be a close call on whether third-quarter earnings remain positive for a 13th consecutive quarter," said Douglas Cote, chief market strategist with ING Investment Management.

"The odds are stacked against it owing to a pronounced slowdown in manufacturing driven by a China hard landing," said Cote. "The coordinated global monetary easing from the Fed, ECB, Japan and now China may have shifted growth forward enough to stem the tide on earnings."

The FTSE 100 in London closed up 1.37% and the DAX in Germany finished up 1.53% after the final print on a September PMI report for the eurozone manufacturing sector was revised to 46.1 versus the prior estimate of 46.

The European markets were also relieved over an as-expected capital shortfall shown Friday in Spain's bank stress tests that was comfortably within the tolerance of the European Financial Stability Facility.

China's September manufacturing purchasing managers' index came in with a read of 49.8 versus 49.2 in August.

In Japan, a survey pointed to deteriorating confidence among large manufacturers.

The Nikkei Average in Japan finished down 0.83% on Monday. Hong Kong's market was closed for a public holiday.

November crude oil futures settled up 29 cents to $92.85 a barrel. December gold futures popped $9.40 to settle at $1,783.30 an ounce.

The benchmark 10-year Treasury rose 3/32, diluting the yield to 1.628%. The greenback fell 0.10%, according to the dollar index.

In corporate news, Nokia ( NOK) was a big mover to the upside after the company reached a deal to provide its mapping and location services for Oracle ( ORCL) customers.

Wendy's ( WEN) shares tumbled 6.1% after Janney Capital cuts its view on the quick-service hamburger stock to neutral and brought down its valuation forecast on Wendy's to $4.75, estimating flat to a 2% decline in North American same-store sales.

Berkshire Hathaway's ( BRK.B) MidAmerican Energy subsidiary agreed to buy two wind projects under construction about 120 miles north of Los Angeles from wind developer Terra-Gen Power. Berkshire shares added less than 1% on the news.

Cal-Maine Foods ( CALM) posted first-quarter earnings of 39 cents a share, up from 13 cents a share the same time last year as revenue increased 12% to $272.9 million, reflecting higher average market prices for shell eggs. Analysts were expecting earnings of 40 cents a share on revenue of $282 million. Shares closed up 1.7%.

Goldman Sachs ( GS) shares rose 2.8% after a Barron's article over the weekend suggested the stock could rise 25% next year.

--Written by Andrea Tse and Joe Deaux in New York.

>To contact the writer of this article, click here: Andrea Tse.

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