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US STOCKS-Wall St advances in choppy trade after Bernanke
* Bernanke: Fed ready to act, but no mention of stimulus right now
* Trading choppy after comments, S&P briefly turns lower
* Indexes up: Dow 0.6 pct, S&P 0.5 pct, Nasdaq 0.5 pct
By Chuck Mikolajczak
NEW YORK, Aug 31 (Reuters) - U.S. stocks rose on Friday after Federal Reserve Chairman Ben Bernanke said the central bank stood ready to bolster the economy if necessary, although he stopped short of giving an explicit signal of more monetary easing.
Trading was volatile, and the S&P 500 briefly turned negative as investors appeared to be disappointed at first that Bernanke proposed no aggressive measures to restore vigorous growth.
But in his speech to central bankers in Jackson Hole, Wyoming, Bernanke spoke of his "grave concern" about the stagnation of the labor market, which seemed to turn the tide as stocks reversed course and climbed more than 1 percent before paring some of the gains.
In recent weeks stocks had rallied on expectations for stimulus measures from the Fed, such as quantitative easing, as well as from the European Central Bank. But the market stalled this week as investors awaited a signal from the Fed chairman.
"For anyone in the market today to think he was going to just come out and say we are going to do QE is just naive," said John Canally, investment strategist and economist for LPL Financial in Boston.
"He couldn't have been more clear in this speech that he is not satisfied with the economy, not satisfied with where the unemployment rate is and therefore prepared to act."
The Fed's next policy meeting is in mid-September, and many analysts are looking to it for a decision on QE3.
Bernanke is "not more dovish than he has been before, but still dove-ish without question," said Erik Davidson, deputy chief investment officer at Wells Fargo Private Bank in San Francisco
"There should be no doubt in anybody's mind that he is fully committed to doing what is necessary from a monetary standpoint to keep us out of recession."
The Dow Jones industrial average gained 81.11 points, or 0.62 percent, to 13,081.82. The Standard & Poor's 500 Index rose 6.60 points, or 0.47 percent, to 1,406.08. The Nasdaq Composite Index climbed 15.23 points, or 0.50 percent, to 3,063.94.
Recent data has indicated the economy continues to grow. On Friday, consumer sentiment climbed more than expected to a three-month high, while the Institute for Supply Management-Chicago's index of Midwest business activity fell in August to 53.0 from 53.7 in July.
Even with the advance, each of the major indexes was on pace for a second straight weekly decline, with the Dow down 0.6 percent, the S&P off 0.4 percent and the Nasdaq down 0.2 percent.
Volume remained light, with about 2.69 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq with three hours remaining in the session. Daily average of volume is 6.53 billion.
Investors are also looking ahead to the ECB meeting on Thursday that is expected to take pressure off highly indebted countries. Comments from ECB Executive Board member Benoit Coeure rekindled expectations for central bank action.
SAIC Inc was the best performer on the benchmark S&P index, up 4.3 percent to $12.32 after the computer contractor reported a drop in second-quarter profit and said it would split its business into two independent public companies.
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