Market bounces off key level after Bernanke

Stocks rose in volatile trading on Friday as investors shook off a revenue warning from technology bellwether Intel and a downbeat economic assessment by Federal Reserve Chairman Ben Bernanke to snap up bargains.

Major indices fell sharply after Bernanke's comments and Intel's warning, which came within minutes of each other.

The decline took the S&P 500 index to 1,040, a key technical level that has consistently brought in buyers in the past year.
The testing of 1,040 and a better-than-expected reading on second-quarter gross domestic product triggered buying by short sellers, who covered their positions that profited from recent weakness in housing and manufacturing earlier in the week.

"The economic news, while not great, was better than expected," said Fred Dickson, chief market strategist at D.A. Davidson & Co in Lake Oswego, Oregon. He said net short market participants probably decided to cover some of their positions in light of the data.

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