NEW YORK - US stocks erased early losses and ended firmly higher on Friday even as Federal Reserve Chairman Ben Bernanke did not announce any new stimulus measures in his highly-anticipated speech.

MARKET NOT RATTLED

Maybe some were expecting the central bank to announce new bond buying plans during the meeting, but very few investors were seriously thinking the Fed can do anything more ambitious.

That's why the market was not rattled at all although there was some selling on the news. Stocks reacted immediately and dropped right after the text of the speech was released when they found Bernanke was not promising any additional support of the economy.

The Dow Jones industrial average was down about 78 points shortly before the speech started and slumped as many as 220 points shortly after Bernanke started speaking.

However, losses were quickly pared and major indexes marched higher and hold the gains to the close. The Dow Jones industrial average gained 134.72 points, or 1.21 percent, to 11,284.54. The Standard & Poor's 500 jumped 17.53 points, or 1.51 percent, to 1,176.80. The Nasdaq Composite Index rallied 60.22 points, or 2.49 percent, to 2,479.85.

For the whole week, both the blue-chip Dow and the broader S&P 500 gained more than 4 percent, while the tech-heavy Nasdaq jumped nearly 6 percent, the first weekly gain in more than a month.

BERNANKE'S MESSAGE

Investors found nothing new in Bernanke's speech, compared with the Fed statement two weeks ago. However, the central bank chief did leave the door open for more stimulus measures.

Bernanke said the US central bank's policy-setting Federal Open Market Committee would extend its September meeting to two days from one to discuss options for stimulus.

Many investors believed that even without saying, Fed would adjust its balance sheets by buying more longer-dated Treasury bonds, or even intervene in the market in a short period of time to keep its interests low should economic conditions worsen.

In the meantime, Bernanke said he is more optimistic about the long-term growth prospects.

"The growth fundamentals of the United States do not appear to have been permanently altered," said Bernanke, admitting that "the recovery from the crisis has been much less robust than we had hoped."

He also said the US banking system is "generally much healthier" and households also have made some progress in repairing their balance sheets.

DOUBLE-DIP CONCERNS REMAIN

Unfortunately, even Bernanke succeed in not rattling the financial market on Friday, concerns about a double-dip recession remains and will still haunt investors.

Friday figures from the Commerce Department showed that the US economic growth rate was revised downward to an annual rate of 1 percent in the second quarter of this year from the previous estimate of 1.3 percent, due to weaker growth in business inventories, waning exports and declining spending from state and local governments.

Meanwhile, a separate report showed consumer confidence dropped in August to the lowest level since November 2008.

According to the Thomson Reuters and University of Michigan, their final index of consumer sentiment fell to 55.7 this month from 63.7 in July.

"With a growth rate below 1 percent and weakening consumer sentiment, the risk for the United States to fall back to another recession is clearly increasing," said Hong Pingfan, chief of Global Economic Monitoring at the United Nations.