For the week ended August 26, 2011

Week in Review: Stocks gain despite weak data and dashed hopes of Fed action

• Bernanke makes no promises to spur U.S. economy
• U.S. economy grows 1% in Q2
• Moody's downgrades Japan
• Japan announces moves to curb yen's rise
• Buffett to invest $5 billion in Bank of America
• Steve Jobs resigns from Apple CEO position

Stocks were mostly higher this week, but pared gains after the U.S. Federal Reserve Board Chairman failed to promise that the central bank would do more to help the U.S. economy. Throughout the week, investors grappled with weak data, ongoing worries about the spread of the European debt crisis, and a downgrade of Japanese debt.

U.S. and global economic news
Bernanke makes no promises about aid to economy

In a much-anticipated speech, U.S. Federal Reserve Board Chairman Ben Bernanke said the Fed is ready to provide more support to the economy, but he did not indicate that a move was imminent. Throughout the week, investors had pushed stocks higher on the hopes that Bernanke, in remarks delivered Friday to global monetary policymakers in Jackson Hole, Wyoming, would announce a third round of quantitative easing. At the same meeting last year, Bernanke's promise to stimulate the economy through U.S. Treasury purchases sparked an eight-month rally in the equity market.

The week ahead

• The Bureau of Economic Analysis releases reports on personal income and spending on Monday, August 29.
• The Standard & Poor's/Case-Shiller Home Price Indices are reported on Tuesday, August 30.
• Japan's Ministry of Economics, Trade, and Industry releases its industrial production figures on Tuesday, August 30.
• The Institute for Supply Management reports its Manufacturing Purchasing Managers' Index on Thursday, September 1.
• Markit publishes its eurozone purchasing managers index on Thursday, September 1.

Sources: MFS research; The Wall Street Journal; The Wall Street Journal Online; Bloomberg News; Financial Times; Forbes.com; CNNMoney.com; msnbc.com.

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Craig Barton 310-379-9621