Dow rebounds from its slide after Bernanke’s comments

U.S. stocks tallied strong gains Friday, with the Dow industrials bouncing back following a four-session slide, after Federal Reserve Chairman Ben Bernanke said the U.S. central bank has more tools, if needed, to stimulate the economy.

The end-of-week push higher “doesn’t represent much that you can sink your teeth into,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott.

“Volume is light, and most people are probably headed to the Hamptons,” said Luschini, adding that Wall Street will “come back (after the Labor Day holiday) and see what Europe has to say” on Sept. 3.

The final week of summer trading has Bernanke set to speak at an annual gathering in Jackson Hole, Wyo., on Aug. 31, followed by European Central Bank President Mario Draghi the next day.

The Dow rose 100.51 points, or 0.8 percent, to 13,157.97, leaving it down 0.7 percent for the week.

Off 0.5 percent from the week-ago close, the S&P 500 gained 9.05 points, or 0.7 percent, to 1,411.13.

The Nasdaq composite rose 16.39 points, or 0.5 percent, to 3,069.79.

‘Very weak report’ suggests firms reducing investment

Signs that U.S. manufacturing is faltering emerged from a report Friday that orders for long-lasting factory goods, excluding the volatile transportation category, fell in July for the fourth time in five months.

Overall orders for durable goods rose a seasonally adjusted 4.2 percent in July, the Commerce Department said. But excluding aircraft and other transportation goods, orders dropped 0.4 percent.

Durable goods are items meant to last at least three years. Orders for so-called core capital goods, a key measure of business investment plans, fell 3.4 percent. That’s the biggest drop since November and the fourth decline in five months. And June’s figure was revised down to show a drop of 2.7 percent — much worse than the initial estimate of a 1.7 percent fall.

“This is a very weak report,” Paul Ashworth, an economist at Capital Economics, said in a note to clients.

Core capital goods include computers, industrial machinery and steel. The steady decline in such orders suggests that companies are worried that the economy will slow and are reducing investment.

UPS restructuring liabilities for 10,200 workers’ pensions

UPS said Friday that it is restructuring pension liabilities for about 10,200 of its workers, and will book related costs of nearly $900 million in the third quarter.

The world’s largest package company said it has reached a deal with the New England Teamster and Trucking Industry Pension Fund that creates a second pension plan pool. This will allow UPS to be responsible only for its own employees’ pensions and freeze its liability in the original multi-employer pension plan.

Under the agreement, UPS employees won’t see a reduction in their pension benefits, and UPS won’t be required to increase cash contributions for 10 years.

The move is subject to approval by local unions. If approved, the withdrawal will be effective Sept. 16.

The Atlanta company employs nearly 400,000 workers worldwide.

— From news service reports

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