US Stocks end August with Bernanke-inspired bounce (ext.CNN)

NEW YORK (CNNMoney) -- August was a painfully quiet month on Wall Street but stocks still managed to end the month with solid gains.

Investors slogged through the month with few market moving events, ending August on a high note after Federal Reserve chairman Ben Bernanke hinted that additional stimulus could be on the way.

The Dow Jones industrial average, the S&P 500 and the Nasdaq finished the day between 0.5% and 0.7%. That helped all three indexes end the month higher: the Dow gained 0.6%, the S&P 500 rose 2% and the Nasdaq climbed 4%.

But trading volume was at its lowest in five years in August so it remains to be seen if the gains will be sustained into September. Next week brings Europe back into sharp focus, with the European Central Bank meeting Thursday. And in the United States, investors will get the latest monthly jobs report on Friday.

At his speech in Jackson Hole, Wyo., on Friday, Bernanke said the Fed is still willing to take whatever action is necessary to prop up the economy, leaving the door open to a third round of asset purchases known as quantitative easing.

He also defended the Fed's previous two rounds of stimulus measures, saying they created 2 million jobs and supported stock prices.

Investors had been apprehensive that Bernanke would put the kibosh on stimulus after a recent spate of improving economic reports. And it's still not a done deal, said Phil Orlando, chief equity market strategist at Federated Investors.

Whether or not the Fed announces more stimulus is completely "data-dependent," he said. Investors will be analyzing every economic report very closely during the weeks leading up to the Fed's next policy meeting in mid-September -- especially the government's big jobs report due next Friday.

"The Fed has laid out their case [for stimulus] and said they will be vigilant and will pull the trigger if needed," said Orlando. "We still don't think QE3 is going to be acted on in the next meeting, but if economic data takes a substantial move to the downside, the Fed would absolutely step up."

Currencies and commodities:
The dollar fell against the euro, British pound and the Japanese yen.

Oil for October delivery rose $1.85 to settle at $96.47 a barrel.

Gold futures for December delivery rallied $30.50 to $1,687.60 an ounce.