Saturday, 1 September, 2007

US market ended higher followed by Bernanke speech

U.S. stocks ended higher Friday, buoyed by a proposal by President Bush to help subprime homeowners and a speech by Federal Reserve Chairman Ben Bernanke, who did not dispel beliefs that a rate cut will come in September. "Bernanke and Bush were the highlights of the day with the former reminding the markets that the Fed is not out of touch and the latter offering some proposals on how to mitigate some of the problems facing homeowners," said Drew Matus, U.S. senior economic at Lehman Brothers Inc. "We continue to expect a 25-bps rate cut at the Sept 18 FOMC [Federal Open Market Committee], followed by another at the October meeting," Matus said.

The Dow Jones Industrial Average closed 119 points higher, giving it a weekly gain of nearly 1.2% and a monthly gain of 1.1%. Of the Dow's 30 components, 27 finished higher, led by Home Depot Inc which gained 3.4%, and Hewlett-Packard Co. up 1.9%.

The S&P 500 rose 16.35 points at 1,473.99, giving it a weekly loss of 0.4% and a monthly gain of 1.28%. The Nasdaq Composite closed up 31.06 at 2,596.36, a weekly gain of 0.7% and a monthly hike of 1.1%.

Trading volume on the New York Stock Exchange came to nearly 1.4 billion ahead of the long holiday weekend, with advancing stocks ahead of decliners 7 to 1. On the Nasdaq, volume topped 1.5 billion shares, with advancing stocks ahead of declining issues more than 2 to 1.