NEW YORK Stocks climbed on Friday on news the European Central Bank is considering setting targets in a new bond-buying program that could help contain euro-zone borrowing costs and on hopes of more stimulus from the Federal Reserve.
Despite the day's advance, the S&P 500 broke a six-week string of gains. For the week, the benchmark index fell 0.5 percent. Conflicting perceptions of the Fed's commitment to provide more stimulus took a toll on the market this week.
Investor sentiment received a lift on Friday from U.S. Fed Chairman Ben Bernanke, who said the Fed has room to deliver additional monetary stimulus to boost the U.S. economy. Bernanke made the comment in a letter to a congressional oversight panel.
The letter comes a week ahead of the annual economic symposium at Jackson Hole, Wyoming, where Bernanke and ECB President Mario Draghi will speak.
The ECB is discussing yield-band targets under a new bond-buying program to let it shield its strategy and avoid speculators trying to cash in, central bank sources told Reuters on Friday. Any decision would not be made before the ECB's September 6 policy meeting.
"If there can be a nice balance of stimulus that keeps interest rates low, as opposed to throwing more debt at the problems in Europe, and some level of austerity, Europe can get out of this tangle. But that balance is really the key," said Bryant Evans, investment advisor and portfolio manager at Cozad Asset Management, in Champaign, Illinois.
The market's gains were fairly broad. The S&P financial index .GSPF rose 0.6 percent, with shares of American Express (AXP.N) up 1.9 percent at $57.49. The S&P consumer discretionary index .GSPD climbed 0.8 percent, with shares of Amazon.com (AMZN.O) up 1.9 percent at $245.74. During the session, Amazon's stock hit a lifetime intraday high of $246.87.
The Dow Jones industrial average .DJI rose 100.51 points, or 0.77 percent, to end at 13,157.97. The Standard & Poor's 500 Index .SPX added 9.05 points, or 0.65 percent, to 1,411.13. The Nasdaq Composite Index .IXIC gained 16.39 points, or 0.54 percent, to close at 3,069.79.
Volume was the second lowest for a full day this year, with 4.6 billion shares trading on the New York Stock Exchange, the Nasdaq and the Amex. The year-to-date average is 6.6 billion.
The Dow also broke a six-week string of gains, losing 0.9 percent for the week. The Nasdaq slipped 0.2 percent for the week after posting five weeks of gains.
In a letter to a congressional oversight panel on Friday, Bernanke said, "There is scope for further action by the Federal Reserve to ease financial conditions and strengthen the recovery.
Early in the day, the S&P 500 briefly fell below the 1,400 level following cautious comments from German Chancellor Angela Merkel about Greece staying in the euro zone.
It was the first time in two weeks that the benchmark S&P 500 had dipped below 1,400.
"Intermediate-term, weekly indicators, tracking one- to two-quarter shifts are not yet overbought and, in theory, have potential to carry equities higher into the fall," said Robert Sluymer, an analyst at RBC Capital Markets LLC, in New York.
Among gaining stocks, Supervalu (SVU.N) shares jumped 10.9 percent to $2.35 as the U.S. grocery company's advisers sought potential buyers to bid for the entire business, even as several suitors have inquired about its individual parts, according to a Bloomberg report.
On the downside were shares of Autodesk (ADSK.O), which slid 15.6 percent to $30.13. The stock was downgraded by various brokerages a day after the design software maker's quarterly results fell short of expectations for the first time in nearly two years.
On the data front, new orders for durable goods, which are long-lasting U.S. manufactured goods such as computers and aircraft, surged in July, even as declines in a gauge of planned business spending pointed to a slowing growth trend in manufacturing.
The mixed data added to the market's uncertainty on whether the Federal Reserve will act soon to bolster the economy.
(Additional reporting by Angela Moon; Editing by Dave Zimmerman and Jan Paschal)