North American stocks shook off a weak start earlier in the day on Friday, and moved into positive territory after Federal Reserve chairman Ben Bernanke said in a letter that the central bank can do more to boost the economy.
At noon, the Dow Jones industrial average was up 64 points or 0.5 per cent, to 13,121. The broader S&P 500 was up 6 points or 0.4 per cent, to 1408. In Canada, the S&P/TSX composite index was up 21 points or 0.2 per cent, to 12,083.
The gains followed the release of an Aug. 22 letter from Mr. Bernanke to Darrell Issa of the House of Representatives, where he appeared to support the concept that the Fed stands ready to add more stimulus to the economy.
“There is scope for further action by the Federal Reserve to ease financial conditions and strengthen the recovery,” Mr. Bernanke said.
The letter follows the release of Fed minutes from its last monetary policy meeting, which also appeared to support the view that the Fed is gearing up for more stimulus should the economy not show signs of improvement.
On Friday morning, U.S. durable goods orders for July provided a mixed reading. The headline rate rose 4.2 per cent, beating expectations for a far more modest gain of 2.5 per cent. However, after stripping out transportation orders, durable goods sank 0.4 per cent, which was considerably worse than expectations.
What’s worse, orders for non-military capital equipment fell 3.4 per cent, which is the worst dip in eight months.
In Europe, the U.K.’s FTSE 100 ended the day unchanged, while Germany’s DAX index rose 0.3 per cent.
Within the S&P 500, materials fell 0.4 per cent, but energy stocks rose 0.1 per cent, telecom stocks rose 1.3 per cent and consumer discretionary stocks rose 0.6 per cent.
Within Canada’s benchmark index, materials fell 0.4 per cent but energy stocks rose 0.3 per cent and financials rose 0.6 per cent.