Stocks gained after Federal Reserve chairman Ben S. Bernanke said the nation faced “daunting economic challenges” and that the central bank was ready to step in again and prop up the recovery if needed.
Retailers missed out on most of the rally, with the S&P Retail Index up just 0.2 percent, or 1.05 points, to 647.55 at 12:30 on Wall Street as the Dow Jones Industrial Average gained 0.6 percent, or 79.98 points, to 13,080.69.
At his much-anticipated speech in Jackson Hole, Wyo., Bernanke said, “The stagnation of the labor market in particular is a grave concern not only because of the enormous suffering and waste of human talent it entails, but also because persistently high levels of unemployment will wreak structural damage on our economy that could last for many years.”
Bernanke promised the central bank “will provide additional policy accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions.”
Some read that “as needed” as next month.
“Our expectation is that the Fed will at least extend its forward guidance for the fed funds rate into 2015 and will likely initiate [a third program to inject money into the economy],” said Paul Edelstein, IHS Global Insight U.S. economist, referring to the Fed’s two-day meeting starting Sept. 12.
The fashion gainers at midday included Zale Corp., up 8.6 percent to $5.46; The Bon-Ton Stores Inc., 5.1 percent to $10.47; Michael Kors Holdings Ltd., 1.7 percent to $53.45; True Religion Apparel Inc., 1.5 percent to $22.97, and Saks Inc., 1.3 percent to $11.80.
In Europe, the FSTE MIB in Milan showed the strongest gain, closing up 2.2 percent to 15,100.48, while the CAC 40 in Paris rose 1 percent to 3,413.07. The DAX in Frankfurt ended the day up 1.1 percent to 6,970.79, while the FTSE 100 in London dipped slightly, closing down 0.1 percent to 5,711.48.
The gainers included Hermès, which increased 2.3 percent to 228.95 euros after the luxury goods house said had raised its target for sales growth for 2012. Also perking up were Tod’s, ahead 1.7 percent to 84.65 euros; Inditex, 2.1 percent to 88.41 euros; L’Orèal, 2.1 percent to 97.74 euros, and French Connection, up 4.1 percent to 22 pence.
The pound traded at $1.58 against the dollar, while the euro went for $1.25 and the Swiss franc for $1.04.