NEW YORK (AP) — The stock market keeps getting tossed around by the Fed.
Stocks opened lower Friday but turned around after a letter surfaced from Federal Reserve Chairman Ben Bernanke suggesting there was room for the central bank to do more to help the economy.
"There is scope for further action by the Federal Reserve to ease financial conditions and strengthen the recovery," Bernanke wrote to California Rep. Darrell Issa, a Republican, in a letter obtained by The Wall Street Journal.
The Dow Jones industrial average was down 30 points at its low but was up 67 at 13,124 just after 12:30 p.m. EDT. The Standard & Poor's 500 index was up six to 1,408. The Nasdaq composite index rose 13 to 3,066.
In a typically slow August week, investors have hung on hints from the Fed.
On Wednesday afternoon, investors pushed stocks higher after the Fed released meeting minutes that appeared to signal it was ready to take more action to prop up the economy.
On Thursday, stocks declined when a Fed regional bank president cast doubt on the idea, saying in an interview with CNBC that the economic recovery appeared to be gaining strength.
Then on Friday, Bernanke shook up the market again. Issa is head of the House oversight committee and had asked the Fed chairman whether it was premature to consider additional steps.
The Fed has several options, including buying bonds, as it has done twice since the 2008 financial crisis, to lower interest rates and drive investors into the stock market.
For the most part, the market has been hard to read this month. Without much news, trading volume has been low, and investors haven't had much conviction either way about the economy.
Of 17 trading days in August, only once has the Dow moved more than 1 percent. On many days, it has been virtually flat, moving less than one-tenth of a percentage point.
The turbulence likely lies ahead. The Fed's annual meeting in Jackson Hole, Wyo., is at the end of the month. German courts are set to decide next month whether the country can keep participating in bailouts for weaker European countries.
And the presidential election in November, which will help determine whether taxes go up and government spending is cut next year, could throw the markets into turmoil for weeks beforehand.
"People look forward to a lot of questions being answered in the months ahead," said Tony Fratto, a former aide to President George W. Bush and managing partner at Hamilton Place Strategies in Washington. "But they don't have answers today."
This is still likely to be the first down week for the Dow and the S&P 500 after six weeks of gains. The economic reports that have trickled out this week have been mixed at best.
Although housing showed signs of recovery, claims for unemployment insurance rose again. Chinese manufacturing fell to a nine-month low.
Europe, though quiet, still showed signs of tension. Britain reported that its economy shrank in the second quarter, the latest confirmation that the country is still in recession.
The Greek prime minister met with his German and French counterparts on Friday to discuss Greece's bailout. Greek Prime Minister Antonis Samaras said Greece needs "time to breathe" while it implements spending cuts that Germany is demanding.
Durable goods orders, reported by the Commerce Department, rose in July but fell after excluding gains from the transportation category. That sector is traditionally volatile and can be heavily influenced by changes at just a few companies. Durable goods are an important measure of economic health because it shows whether businesses are willing to spend to expand or improve.
Software maker Autodesk skidded more than 15 percent, falling $5.58 to $30.13 after weaker-than-expected second-quarter results. The company is restructuring to shift to cloud and mobile computing, but it also blamed an "uneven" global economy.
Drugmaker Eli Lilly jumped more than 2 percent, rising $1.08 to $43.48, after reporting promising signs about a possible treatment for Alzheimer's disease.
The Madison Square Garden Co., the sports and entertainment company, jumped more than 5 percent, rising $2.16 to $42.41, after reporting that profits tripled in the fiscal fourth quarter. It was helped partly by more home playoff games over the quarter for the New York Rangers and the New York Knicks.
