U.S. Stocks Open Firmly Higher Ahead Of Bernanke

NEW YORK (MarketWatch) -- U.S. stocks were firmly higher at the open on Friday, with investors, hopeful for a fix to the problems at mortgage giants Fannie Mae and Freddie Mac, focusing on Federal Reserve Chairman Ben Bernanke, who is due to give a speech in Jackson Hole, Wyo.

The Dow Jones Industrial Average gained 112 points, or 1%, to 11,546, with 27 of its 30 components,

The S&P 500 index gained 10 points, or 0.8%, to 1,288, while the Nasdaq Composite .

U.S. stocks ended Thursday with a mixed performance, with the Dow Jones Industrial Average rising 12 points and the S&P 500 up 3 points, while the Nasdaq Composite dropped 8 points. A nearly 5% rise in crude-oil futures helped energy exploration firms advance, while some downbeat results from Salesforce.com and JDS Uniphase hurt the tech stocks.

The highlight for Friday's session comes at 10 a.m., when Bernanke delivers a speech on financial stability at a time when government-sponsored mortgage buyers Fannie Mae and Freddie Mac are anything but.

Rob Carnell, an economist at ING in London, doesn't expect a dramatic announcement on monetary policy or the Freddie and Fannie situation.

"We suspect that it is too early for central bankers to put their hands up to their share of the blame in the current mess, especially whilst it is still in full swing," Carnell said. "But the mood at the symposium is likely to be a more somber one than for some years."

The Wall Street Journal reported Friday that Freddie Mac executives are sounding out private-equity firms and other investors about buying new common or preferred shares, though there's reluctance from investors amid fears the U.S. Treasury will nationalize them.

There's also the prospect that U.S. presidential candidate Barack Obama will name his running mate.

Ahead of the Bernanke speech, the dollar jumped 1.4% to 109.95 yen, and oil futures fell $2.42 to $118.76 a barrel.

Also in focus, Lehman Brothers traded nearly 11.5% higher on suggestions it could be the target of a hostile takeover bid.

On the corporate front, The Gap rose 5.8% after the retailer late Thursday reported a 51% profit rise and lowered its capital-spending forecast.

King Pharmaceuticals launched a $1.4 billion, or $33-a-share, bid for Alpharma .

Pacific Sunwear of California dropped 32% on a cautious second-half outlook.

Boeing was in the spotlight on a Journal report that it may withdraw its bid for a tanker contract if it's not given more time by the Pentagon to prepare. A venture between Northrop Grumman and EADS is the rival for that contract.

The same newspaper reported that Verizon is close to choosing Google as its search provider on mobile phones.

TNT shares rose in Amsterdam as The Times (of London) reported speculation that United Parcel Service may make an offer for its Dutch rival this weekend.

Also on the M&A front, Aon said it's paying $1.4 billion for U.K. re-insurer Benfield.

By Nick Godt