NEW YORK (Reuters) – Stocks rebounded from two days of sharp losses on Wednesday after the Federal Reserve said it is prepared to do more for the economy if conditions warrant, helping to stanch the panicky reaction to Europe's debt crisis.

Trading volume was light, however, possibly signaling that worries about Greece hold greater sway than the Fed at this time. Investors sold heavily this week after Greece said it would hold a referendum on an EU bailout crucial to stabilizing the euro zone's financial system.

Federal Reserve Chairman Ben Bernanke said the central bank was closely monitoring developments in Europe and left open the possibility that the Fed could expand its holdings of mortgage debt if U.S. economic conditions worsened.

"Bernanke was clear that they were prepared to do more, that they have the tools to do more," said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York. "We remain in a very volatile situation."

The energy and financial sectors were among the strongest performers on Wednesday after having led the market lower the previous two sessions. The S&P energy index rose 2.9 percent while the financial index rose 2.8 percent.

Some 7.5 billion shares were traded on the NYSE, the Amex and Nasdaq, which was nearly 10 percent below the 20-day moving average and well below Tuesday's high volume selloff when over 10 billion shares changed hands.

"There's no volume, which means there's no conviction in the move; the market remains 100 percent "macro" driven, and any news out of Europe could still shift markets," said Eric Lichtenstein, managing director at Knight Capital in Jersey City, New Jersey,

The Dow Jones industrial average rose 178.08 points, or 1.53 percent, at 11,836.04. The Standard & Poor's 500 Index gained 19.62 points, or 1.61 percent, at 1,237.90. The Nasdaq Composite Index added 33.02 points, or 1.27 percent, at 2,639.98.

Also helping Wednesday's market gains, data showed U.S. private employers added more jobs than expected last month, continuing a recent pattern of better-than-expected economic data.

Conditions in Europe remained a wild card as sources told Reuters the EU and IMF will not release an 8 billion euro payment to Greece until after the country has held its referendum, which could happen in December.

Among advancing stocks, Citigroup Inc gained 2.3 percent to $29.83 and JPMorgan Chase & Co added 2.8 percent to $33.64. The KBW Bank index climbed 3.3 percent.

The CBOE volatility index eased after gaining more than 40 percent over the past two sessions to hit its highest in a month. On Wednesday it fell 5.8 percent to 32.74.

Despite a decline in the VIX index, often called Wall Street's fear gauge, it is still about 16 percent above fair value and is likely to remain elevated as traders struggle to price Greek referendum risk, Credit Suisse said in a research note.

"The furious VIX perturbation and gyrations observed over the last two days can basically be distilled down to the following takeaway: equity investors don't know how to price referendum risk," said Credit Suisse in a research note.

MasterCard Inc shares jumped 7 percent to $357.66 after the credit card processor reported its quarterly profit easily beat estimates on double-digit increases in volumes.

(Reporting by Edward Krudy; Additional reporting by Ryan Vlastelica; Editing by Kenneth Barry)

NEW YORK (Reuters) – Stocks rebounded from two days of sharp losses on Wednesday after the Federal Reserve said it is prepared to do more for the economy if conditions warrant, helping to stanch the panicky reaction to Europe's debt crisis.

Trading volume was light, however, possibly signaling that worries about Greece hold greater sway than the Fed at this time. Investors sold heavily this week after Greece said it would hold a referendum on an EU bailout crucial to stabilizing the euro zone's financial system.

Federal Reserve Chairman Ben Bernanke said the central bank was closely monitoring developments in Europe and left open the possibility that the Fed could expand its holdings of mortgage debt if U.S. economic conditions worsened.

"Bernanke was clear that they were prepared to do more, that they have the tools to do more," said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York. "We remain in a very volatile situation."

The energy and financial sectors were among the strongest performers on Wednesday after having led the market lower the previous two sessions. The S&P energy index rose 2.9 percent while the financial index rose 2.8 percent.

Some 7.5 billion shares were traded on the NYSE, the Amex and Nasdaq, which was nearly 10 percent below the 20-day moving average and well below Tuesday's high volume selloff when over 10 billion shares changed hands.

"There's no volume, which means there's no conviction in the move; the market remains 100 percent "macro" driven, and any news out of Europe could still shift markets," said Eric Lichtenstein, managing director at Knight Capital in Jersey City, New Jersey,

The Dow Jones industrial average rose 178.08 points, or 1.53 percent, at 11,836.04. The Standard & Poor's 500 Index gained 19.62 points, or 1.61 percent, at 1,237.90. The Nasdaq Composite Index added 33.02 points, or 1.27 percent, at 2,639.98.

Also helping Wednesday's market gains, data showed U.S. private employers added more jobs than expected last month, continuing a recent pattern of better-than-expected economic data.

Conditions in Europe remained a wild card as sources told Reuters the EU and IMF will not release an 8 billion euro payment to Greece until after the country has held its referendum, which could happen in December.

Among advancing stocks, Citigroup Inc gained 2.3 percent to $29.83 and JPMorgan Chase & Co added 2.8 percent to $33.64. The KBW Bank index climbed 3.3 percent.

The CBOE volatility index eased after gaining more than 40 percent over the past two sessions to hit its highest in a month. On Wednesday it fell 5.8 percent to 32.74.

Despite a decline in the VIX index, often called Wall Street's fear gauge, it is still about 16 percent above fair value and is likely to remain elevated as traders struggle to price Greek referendum risk, Credit Suisse said in a research note.

"The furious VIX perturbation and gyrations observed over the last two days can basically be distilled down to the following takeaway: equity investors don't know how to price referendum risk," said Credit Suisse in a research note.

MasterCard Inc shares jumped 7 percent to $357.66 after the credit card processor reported its quarterly profit easily beat estimates on double-digit increases in volumes.

(Reporting by Edward Krudy; Additional reporting by Ryan Vlastelica; Editing by Kenneth Barry)

HANOVER, N.H. – Former House Speaker Newt Gingrich says Americans have a right to be angry with the economy. But if Wall Street protesters wanted to change things, they should seek the firing of Federal Reserve Chairman Ben Bernanke and Treasury Secretary Timothy Geithner.

Asked if Wall Street financiers should go to jail for the economic problems, Gingrich says political leaders in Washington are more responsible for the downturn and cited Bernanke and Geithner for firing.

Rep. Michele Bachmann of Minnesota says the economic meltdown can be traced back to policies of the federal government that pushed subprime loans that hurt the housing market. She declined to say whether Wall Street is to blame for the economic downturn.

NEW YORK (Reuters) – The Nasdaq jumped 1 percent on Tuesday, reversing an earlier steep drop as tech shares rose and the overall stock market trimmed losses on comments from Federal Reserve Chairman Ben Bernanke that he was ready to take more steps to help the fragile recovery.

The market pared earlier sharp losses, which had pushed the broad S&P 500 into bear market territory, which Wall Street defines as a drop of 20 percent from a recent high.

The latest worries about the euro zone's debt problems kept a lid on the market's gains, and the Dow stayed in negative territory.

"Bernanke could be the catalyst for a returned focus to domestic issues," said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co., in San Francisco.

The Nasdaq led the move higher, with information technology among the S&P 500's top advancing sectors. The S&P technology index (.GSPT) was up 1 percent.

Bernanke told the Joint Economic Committee of Congress that the Fed was prepared to take more steps to help a fragile recovery, held back by a weak job market and financial stresses in Europe.

The Dow Jones industrial average (.DJI) was down 73.71 points, or 0.69 percent, at 10,581.59. But the Standard & Poor's 500 Index (.SPX) was up 2.36 points, or 0.21 percent, at 1,101.59. The Nasdaq Composite Index (.IXIC) was up 32.74 points, or 1.40 percent, at 2,368.57.

Apple (AAPL.O) shot up 1.5 percent to $380.30 ahead of the release of its new iPhone, dubbed the iPhone 5.

The Federal Reserve chairman's words gave investors some reassurance.

"Bernanke's testimony today … suggests he is very keen to avoid saying anything that might unnerve the financial markets," Paul Ashworth, chief U.S. economist for Capital Economics in Toronto, said in a note.

"He didn't repeat that 'there are significant downside risks to the economic outlook,' which was the language included in the last FOMC statement that caused such a panic in the markets two weeks ago."

Analysts have been worried, however, that stocks are headed for an extended period of poor performance, partly because of the fears over deepening problems in Europe.

Earlier, European officials delayed a vital aid payment to debt-stricken Greece, but the government said it was not preparing for a default.

(Reporting by Caroline Valetkevitch; Editing by Jan Paschal)

NEW YORK (Reuters) – Wall Street hopes for more Fed action and clear signs European leaders will follow through on their new urgency to tackle the euro zone debt crisis if U.S. stocks are to build on their best week since early July.

Investors expect the Federal Reserve to take steps to pull down long-term interest rates when policymakers meet on Tuesday and Wednesday to help revive the persistently weak U.S. economy.

Fed Chairman Ben Bernanke, speaking in Jackson Hole, Wyoming, on August 26, said the Fed's Open Market Committee would meet for two days in September instead of the scheduled one day to discuss ways to boost the recovery.

But even with expectations of more intervention to boost the economy, investors will keep a close eye on developments in Europe.

The Standard & Poor's 500 index (.SPX) posted a 5.4 percent gain last week, its best since early July. The Nasdaq composite index (.IXIC) gained 6.3 percent for the week while the Dow Jones industrial average (.DJI) rose 4.7 percent

Any lack of progress or backsliding on efforts to get the currency bloc's fiscal house in order will renew worries the crisis could seriously damage the world financial system and major economies.

"The Fed is really going to dominate next week," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

"But the market has been trying to work its way higher here, trying to feel if maybe the European thing won't cascade out of control."

Treasury Secretary Timothy Geithner, at a meeting of euro zone finance ministers in Poland on Friday, urged them to leverage their bailout fund to better tackle the debt crisis, but there was no agreement on what steps to take.

While the Standard & Poor's 500 (.SPX) has been moving upward over the past week, the benchmark index has been stuck in roughly a 100-point range over the last six weeks.

It is likely to run into resistance near the 50-day moving average of about 1,228, with analysts also pointing to the 1,250 level as the next significant hurdle.

"This is really a consolidation phase, which is normal after the kind of early August swoon that we had. So far this trading range is developing in a very positive and healthy way," said Gail Dudack, chief investment strategist at Dudack Research Group in New York.

"Longer term, the market is looking better but we are getting very close to that resistance at 1,250, which would be pretty surprising if we can break above that at this early juncture. It could take a little more time, people shouldn't be disappointed."

This week's economic calendar includes reports on the beleaguered housing market along with weekly initial jobless benefits claims.

Housing "is dead and it will stay dead, and I don't expect anything out of unemployment either," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey. "The biggest event is Bernanke."

Companies due to post earnings this week include homebuilder Lennar Corp (LEN.N), Nike Inc (NKE.N), General Mills Inc (GIS.N) as well as technology companies Adobe Systems (ADBE.O), Red Hat Inc (RHT.N) and Oracle Corp (ORCL.O).

FedEx Corp (FDX.N), the No. 2 U.S. package delivery company, which is seen as a proxy for how the economy is performing, is also scheduled to report quarterly results.

Though earnings have managed to hold up in the face of a lackluster recovery, analysts worry this might not last if the financial system suffered the shock of a Greek debt default.

But while many feel Bernanke has telegraphed the plans for the Fed meeting, the euro zone debt crisis remains an uncertainty that could knock the market lower.

"It's absolutely the wild card because Europe's problems may be similar to what we saw in 2008, but they are much more difficult to deal with because country debt is far more difficult to deal with than mortgage debt," Dudack said.

She added that having so many countries that are part of a committee trying to solve the problem only added to the complications.

(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)

NEW YORK (Reuters) – Wall Street hopes for more Fed action and clear signs European leaders will follow through on their new urgency to tackle the euro zone debt crisis if U.S. stocks are to build on their best week since early July.

Investors expect the Federal Reserve to take steps to pull down long-term interest rates when policymakers meet on Tuesday and Wednesday to help revive the persistently weak U.S. economy.

Fed Chairman Ben Bernanke, speaking in Jackson Hole, Wyoming, on August 26, said the Fed's Open Market Committee would meet for two days in September instead of the scheduled one day to discuss ways to boost the recovery.

But even with expectations of more intervention to boost the economy, investors will keep a close eye on developments in Europe.

Any lack of progress or backsliding on efforts to get the currency bloc's fiscal house in order will renew worries the crisis could seriously damage the world financial system and major economies.

"The Fed is really going to dominate next week," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

"But the market has been trying to work its way higher here, trying to feel if maybe the European thing won't cascade out of control."

Treasury Secretary Timothy Geithner, at a meeting of euro zone finance ministers in Poland on Friday, urged them to leverage their bailout fund to better tackle the debt crisis, but there was no agreement on what steps to take.

While the Standard & Poor's 500 (.SPX) has been moving upward over the past week, the benchmark index has been stuck in roughly a 100-point range over the last six weeks.

It is likely to run into resistance near the 50-day moving average of about 1,228, with analysts also pointing to the 1,250 level as the next significant hurdle.

"This is really a consolidation phase, which is normal after the kind of early August swoon that we had. So far this trading range is developing in a very positive and healthy way," said Gail Dudack, chief investment strategist at Dudack Research Group in New York.

"Longer term, the market is looking better but we are getting very close to that resistance at 1,250 which would be pretty surprising if we can break above that at this early juncture. It could take a little more time, people shouldn't be disappointed."

The week's economic calendar includes reports on the beleaguered housing market along with weekly initial jobless benefits claims.

Housing "is dead and it will stay dead, and I don't expect anything out of unemployment either," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

"The biggest event is Bernanke."

Companies due to post earnings next week include homebuilder Lennar Corp (LEN.N), Nike Inc (NKE.N), General Mills Inc (GIS.N) as well as technology companies Adobe Systems (ADBE.O), Red Hat Inc (RHT.N) and Oracle Corp (ORCL.O).

FedEx Corp (FDX.N), the No. 2 U.S. package delivery company, which is seen as a proxy for how the economy is performing, is also scheduled to report quarterly results.

Though earnings have managed to hold up in the face of a lackluster recovery, analysts worry this might not last if the financial system suffered the shock of a Greek debt default.

But while many feel Bernanke has telegraphed the plans for the Fed meeting, the euro zone debt crisis remains an uncertainty that could knock the market lower.

"It's absolutely the wild card because Europe's problems may be similar to what we saw in 2008, but they are much more difficult to deal with because country debt is far more difficult to deal with than mortgage debt," Dudack said.

She added that having so many countries that are part of a committee trying to solve the problem only added to the complications.

(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)

U.S. stock futures are following world markets lower after closely-watched speeches by Federal Reserve Chairman Ben Bernanke and President Barack Obama.

Bernanke said that weak consumer spending is hurting the economy. He offered no new details about plans to spur growth. Stocks slid after Bernanke spoke Thursday afternoon.

Thursday evening, President Obama unveiled a $447 billion package of tax cuts and new spending to stimulate job growth. Its chances of passing Congress are uncertain. Republicans control the House and many of them oppose any new spending.

Two hours before the market opens, S&P 500 futures are down 7 points, or 0.6 percent, at 1,173. Dow Jones industrial average futures are down 50, or 0.5 percent, at 11,173. Nasdaq 100 futures are down 13, or 0.6 percent, at 2,199.

BANGKOK – Asian stocks swung between gains and losses Friday as traders weighed news China’s inflation moderated slightly against disappointment that Fed chief Ben Bernanke offered no immediate support for the ailing U.S. economy.

Oil prices rose near $90 a barrel as investors bet a new U.S. jobs package unveiled by President Barack Obama will help boost demand for crude. The dollar weakened against the yen and the euro.

Japan’s Nikkei 225 index fell 0.4 percent to 8,759.06 after spending part of the day in positive territory. The government reported that the country’s economy contracted in the April-June quarter at an annual rate of 2.1 percent, worse than the initial estimate of 1.3 percent.

But the result was not unexpected, given the scope of the damage done by the March earthquake and tsunami that destroyed many of northeastern Japan’s factories and businesses. Economists expect the world’s No. 3 economy to pick up in the months ahead.

South Korea’s Kospi fell 1.2 percent at 1,822.79. Australia’s S&P/ASX 200 rose 0.7 percent to 4,216.50 and Hong Kong’s Hang Seng was 0.2 percent higher at 19,957.18.

Mainland China’s Shanghai Composite Index rose 0.1 percent to 2,502.26 after the government said increases in consumer prices had moderated in August. Prices rose 6.2 percent from a year earlier, easing from a 37-month high of 6.5 percent in July.

That raised the possibility of China easing its tight monetary policies — or at least putting further interest rate hikes on hold — and helping it to ward off the impact of a slowing global economy.

“It was a mild relief to markets,” said Ric Spooner, chief market analyst at CMC Markets in Sydney. “Particularly if pork and food prices continue to come off, that puts the Chinese government and monetary authorities in a position to do what is being done around the rest of the world — to stop tightening and take it as a ‘steady as it goes’ approach.”

Another good sign, according to Spooner: American consumer borrowing rose nearly $12 billion in July as demand for school and auto loans fueled the increase. Borrowing is usually a sign of confidence in the economy because consumers tend to take on more debt when they feel wealthier.

On Wall Street, stocks closed sharply lower Thursday after Bernanke in a speech closely watched by investors said the Fed will consider a range of steps at its Sept. 20-21 meeting.

The Dow Jones industrial average lost 1 percent to 11,295.81. The Standard & Poor’s 500 index fell 1.1 percent to 1,185.90. The Nasdaq composite shed 0.8 percent to 2,529.14. Each index had posted gains earlier in the day.

Also Thursday, President Barack Obama, looking to jolt the U.S. economy back to health, proposed a $447 billion plan for creating jobs in a nationally televised speech before Congress late Thursday. Obama will likely have a hard time getting much of his plan through Congress since Republicans control the House of Representatives.

Concerns about the U.S. economy have pushed stocks lower each month since April. Many traders now say the stock market is factoring in the assumption that the economy is in a recession, meaning limited job growth and weaker corporate profits.

In energy trading, benchmark oil for October delivery was up 14 cents to $89.19 in electronic trading on the New York Mercantile Exchange. Crude fell 29 cents to finish at $89.05 on Thursday.

In London, Brent crude for October delivery was down 20 cents at $114.35 on the ICE Futures exchange.

In currencies, the dollar slipped to 77.45 yen from 77.54 yen late Thursday in New York. The euro was higher at $1.3906 from $1.3876.

Credit Agricole CIB said that the debt crisis swirling around smaller European countries was finally being felt by the euro, which had been showing persistent strength against the greenback.

The euro “broke below the psychologically important 1.40 level as peripheral tensions are finally beginning to take their toll on the currency,” the bank said in a report.

BERNANKE: Stocks gave up their morning gains after Federal Reserve Chairman Ben Bernanke offered no specific stimulus plans in a closely-watched speech on Thursday. Investors have been hoping the Fed will take additional steps to support the economy.

MIXED SIGNS: First-time applications for unemployment benefits rose more than economists were expecting. But in a hopeful sign for the economy, U.S. exports reached an all-time high.

THE INDEXES: The Dow fell 119 points, or 1 percent, to 11,296. The S&P 500 lost 13 points, 1.1 percent, to 1,186. The Nasdaq dropped 20 points, 0.8 percent, to 2,529.

NEW YORK (Reuters) – Stocks closed sharply lower on Thursday after Federal Reserve Chairman Ben Bernanke gave no indications of new stimulus measures to boost the flagging economy in a keenly awaited speech.

Investors have been looking to Bernanke, who gave his outlook on the U.S. economy on Thursday, and other policymakers to address a host of concerns from slowing global growth to Europe's debt crisis.

A rise in jobless claims reported earlier in the day underscored the weakness in the U.S. economy and came ahead of a speech by President Barack Obama. Obama is due to speak at 7 p.m. and is expected lay out a plan for creating jobs.

"The Fed hasn't come out with more options or tools that the market wants or was expecting," said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York. "The market was disappointed because this wasn't a game changer."

Banks were the biggest decliners after sharp gains on Wednesday. They have been one of the most turbulent sectors in the volatility that has engulfed equity markets this summer. The KBW Bank Index (.BKX) fell nearly 3 percent.

The Dow Jones industrial average (.DJI) dropped 119.05 points, or 1.04 percent, to 11,295.81. The Standard & Poor's 500 Index (.SPX) fell 12.72 points, or 1.06 percent, to 1,185.90. The Nasdaq Composite Index (.IXIC) lost 19.80 points, or 0.78 percent, to 2,529.14.

Among bank shares, JPMorgan (JPM.N) fell 3.8 percent to $33.51, the biggest decliner on the Dow. Bank of America Corp (BAC.N) fell 3.7 percent to $7.20. The S&P 500 financial sector index (.GSPF) lost 2.3 percent.

The VIX volatility index (.VIX), a measure of expected market turbulence, rose 2.8 percent to 34.32. Although down from levels seen in August, it is still elevated compared with early in the year.

Volume on the NYSE, the Nasdaq and Amex was 7.46 billion shares, 13 percent below the 20-day moving average, a sign that participation is weakening after the high volume sell-off in August. About 76 percent of NYSE shares fell.

The current market conditions mean that short-term views are dominating and company fundamentals are taking a back seat.

"All of a sudden everybody is a trader, now, nobody is an investor," said Sam Ginzburg, a senior trader at First New York Securities. "Everything is trading macro, everything is trading on psychology, and everybody is staring at charts."

Stocks of health insurers fell The Morgan Stanley Healthcare payor index (.HMO) fell 2.4 percent, while Aetna Inc (AET.N) fell 1.9 percent to $39.19.

A U.S. appeals court on Thursday overturned a lower court ruling that the federal government could not compel people to buy health insurance or face paying a penalty. The appeals court ruled only that Virginia did not have standing to challenge the federal law. It did not rule on whether the mandate itself was constitutional.

The S&P 500 struggled to hold up the 1,200 mark although it broke above that level earlier in the day, which could mark a significant resistance level for the market.

On the upside, Yahoo shares (YHOO.O) rose 6.1 percent to $14.44 after a top shareholder, Third Point LLC, demanded that Yahoo overhaul its board of directors.

Shares of SanDisk Corp (SNDK.O) , a flash memory maker, jumped 2.4 percent to $38.52.

Separately, the government said the U.S. trade deficit narrowed considerably in July, a positive signal for economic growth in the third quarter after a sluggish first half.

(Reporting by Edward Krudy; Editing by Leslie Adler)