Wall Street Posts Third-Straight Monthly Advance

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Wall Street capped August in rally mode as traders remained optimistic that the Fed will unleash further measures to boost the U.S. economy. The major market averages also ended the month to the upside.

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Today's Markets

The Dow Jones Industrial Average jumped 90.1 points, or 0.69%, to 13091, the S&P 500 gained 7.1 points, or 0.51%, to 1407 and the Nasdaq Composite climbed 18.3 points, or 0.6%, to 3067.

For the month, the Dow edged up by 0.6%, the S&P 500 jumped 2% and the Nasdaq zipped higher by 4.4%. Technology, consumer discretionary and financial stocks posted the biggest gains. On the other side of the spectrum, safety plays like utilities and consumer staples struggled.

The world economy has come squarely into focus in recent days.

At a closely-watched speech at the Federal Reserve’s economic symposium in Jackson Hole, Wyoming, the central bank’s Chairman Ben Bernanke said current economic conditions are "far from satisfactory."

In particular, he called the slowly recovering labor market a "grave concern" and warned the Fed alone can’t shore up the economy. He also defended the traditional and non-traditional tools the central bank has used in propping up the economy, but came short of suggesting what further actions will be taken.

The Fed is currently engaged in a plan by which it is extending the maturity of its balance sheet without increasing its size, but has repeatedly said it stands ready to do more.

Indeed, in minutes released last week it was revealed the Fed governors discussed what means the central bank can take to boost the slowly growing economy. Among the items discussed was the potential of buying either Treasury or mortgage-backed assets.

Market participants broadly saw the speech as supporting a dovish tone from the Fed, without adding much new information.

"Mr. Bernanke has made it clear that more needs to be done, but does so without hinting at the timing of when more monetary policy easing could be delivered," analysts at Nomura wrote in a note to clients.

In a sign of light trading has been of late, only 2.4 billion shares traded hands on the New York Stock Exchange on Thursday. It was the lightest full trading day of the year, and the twelfth time this month volume came in below 3 billion shares.

Traders also got a handful of economic reports. A final reading on consumer sentiment for the month of August checked in at 74.3, higher than a preliminary reading of 73.6, according to a survey by Thomson Reuters and the University of Michigan.

The expansion in the manufacturing sector in the Midwest cooled down slightly in August. The Institute for Supply Management-Chicago's ISM gauge fell to 53 in August from 53.7 in July, short of economists expectations of 53.5.

The broad markets are looking to close out the month on a high note. The S&P 500 is up 1.5% and the Nasdaq is 3.7% to the upside. The narrower Dow, however, is essentially flat for the month.

Commodities markets rallied. The benchmark crude oil contract in New York jumped $1.38, or 1.5%, to $96.02 a barrel. Wholesale New York Harbor gasoline climbed 1.2% to $3.119 a gallon.

In metals, gold gained $25.80, or 1.6%, $1,683 a troy ounce.

Foreign Markets

The Euro Stoxx 50 rallied 1.5% to 2441, the English FTSE 100 dipped 0.14% to 5711 and the German DAX jumped 1.1% to 6971.

In Asia, the Japanese Nikkei 225 sold off by 1.6% to 8840 and the Chinese Hang Seng dipped 0.36% to 19483.

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