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Tuesday, August 23, 2011

US Stocks end higher after a bumpy ride (ext.)

NEW YORK (CNNMoney) -- U.S. stocks rose modestly Monday as investors grappled with an uncertain economic outlook ahead of a key speech by Fed chairman Ben Bernanke.

The advance came on a day with no major economic reports or major corporate developments. As a result, stocks traded in a wide range as investors anticipated events later in the week.

But the gains were a welcome change of pace after the extreme volatility of the last few weeks. Investors have been rattled by a spate of gloomy economic news and signs the debt crisis in Europe is not going away anytime soon.

"The market is in the process of testing for a bottom," said Bruce McCain, chief investment strategist at Key Private Bank.

McCain said investors remain concerned about the debt problems in Europe, where policymakers have yet to propose a long-term solution. But he said business and consumer confidence in the United States may not be a weak as many investors had feared.

Investors are also looking ahead to Friday, when Bernanke will give his keynote speech at the Kansas City Fed's annual retreat in Jackson Hole, Wyo.

At last year's annual meeting, the Fed chief prepared the market for QE2, a bond-buying program that is widely credited for supporting stocks earlier this year.

Now, investors are eager to hear what Bernanke has to say about the flagging U.S. economy. But there are questions about how far the Fed can go to stimulate growth, with trillions of dollars on its balance sheet and interest rates expected to remain low for the next two years.

The dollar slipped against the euro and the Japanese yen. But it edged up versus the British pound.

Oil for October delivery gained $1.84 to $84.10 a barrel. Meanwhile, Brent crude, the European benchmark, fell $1.10, or almost 1% to $107.52 a barrel, amid hopes that Libyan oil production may soon resume.

Gold futures for December delivery rose $35 to $1,887.80 an ounce. The precious metal rose above a record $1,900 an ounce in electronic trading later Monday.

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