WALL STREET >>> QE3 Buzz Brings Out the Bulls

DJIA Whittles Intraday Lead;
Snap 3-day Losing Streak

U.S. stocks bounced back from a three-session drubbing today, with Federal Reserve Chairman Ben Bernanke luring buyers from the sidelines. Speaking on Capitol Hill, the central banker hinted at "additional policy support" in the wake of an extended period of economic weakness, but reiterated the Fed's forecast for a "moderate" recovery. Nevertheless, buzz of a possible "QE3" fueled stocks into the black, and sent the greenback reeling -- which translated into a second straight all-time high for dollar-denominated gold. However, Bernanke's warning that debt-ceiling delays could be "catastrophic" took some of the wind out of the bulls' sails, with the major market indexes giving back the majority of their gains by the bell.

At its intraday acme, the Dow Jones Industrial Average (DJIA – 12,491.61) boasted a gain of more than 160 points, but whittled its surplus down to just 44.7 points, or 0.4%, by the close. Earlier in the session, the blue-chip barometer made a brief trip north of 12,600, but stood south of 12,500 for the second straight session by the time the dust settled. Among the Dow's 30 components, Caterpillar (CAT) paced the 22 advancing equities with a gain of 1.6%, while American Express (AXP) led the eight laggards with a 0.9% dip.

Likewise, the S&P 500 Index (SPX – 1,317.72) was up more than 17 points at its session high, but trimmed its lead to 4.1 points, or 0.3%, by the bell. Stifling the broad-market index's upward momentum was the 1,333 neighborhood, which marks double its March 2009 low. Finally, the Nasdaq Composite (COMP – 2,796.92) also lost most of its steam as the session progressed, settling beneath the 2,800 level for the second straight day. Nevertheless, the tech-rich index still fared the best of the three, tacking on 15 points, or 0.5%.

August Crude Closes Above $98

Crude futures muscled higher for the second straight session today, bolstered by a steeper-than-expected drop in domestic stockpiles. Specifically, the Energy Information Administration (EIA) said crude inventories fell by 3.1 million barrels last week, compared to economists' expectations for a slimmer 1.8-million-barrel drop. In addition, Bernanke's hints of additional stimulus on the horizon pressured the greenback lower, beckoning foreign-currency holders to the dollar-denominated asset. By the close, August-dated crude oil futures tacked on 62 cents, or 0.6%, to end at $98.05 per barrel.

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