North American stocks shook off a weak start on Friday, ending the day in positive territory after Federal Reserve chairman Ben Bernanke said in a letter that the central bank can do more to boost the economy.
The Dow Jones industrial average closed at 13,157.97, up 100.51 points or 0.8 per cent. The broader S&P 500 closed at 1411.12, up 9.04 points or 0.6 per cent. In Canada, the S&P/TSX composite index closed at 12,082.23, up 19.72 points or 0.2 per cent.
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 in the letter.
The letter followed earlier this week 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 sharpest dip in eight months.
Among commodities, crude oil fell to $96.15 (U.S.) a barrel, down 12 cents. Gold was almost unchanged, at $1,672.90 an ounce, up 10 cents. Among Canadian commodity producers, Barrick Gold Corp. fell 1.1 per cent and Suncor Energy Inc. rose 0.6 per cent.