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10A Daily News – Friday, August 26, 2011 NEW YORK (AP) — A three-day stock rally ended much like it began, with a steep and sudden turn. Stocks started higher early Thursday but turned lower within 20 minutes. Indexes in the U.S. and Europe sank after Ger- many's main stock index, the DAX, suddenly dipped 4 percent. Traders strug- gled to explain the dive. The Dow Jones industri- al average fell 170.89 points, or 1.5 percent, to close at 11,149.82. It had been up 85 points shortly after the opening bell. Bank of America Corp. jumped 9 percent on news that Warren Buffett will invest $5 billion in the trou- bled bank. BofA had lost half its value this year as investors grew worried about its need to raise capi- tal and its growing liabili- ties related to subprime mortgages. Other banks also rose after the billionaire investor Stocks sink, ending a three-day rally; Dow off 170 Wall Street gave his backing to Bank of America. Morgan Stanley gained 2.7 percent and Cit- igroup Inc. 4.8 percent. BofA and American Express Co. were the only companies in the Dow to rise. This week's trading has been marked by a series of sudden reversals. Robert Stein, a money manager responsible for $1.2 billion at Astor Asset Manage- ment, said questions about the economy have made investors uncertain and the stock market more volatile. Gains made one day can disappear the next, or even in the same day. ''We're not seeing any- thing that's convincingly bearish enough to call another recession, but noth- ing optimistic enough to suggest that a recovery is going to regenerate,'' Stein said. Friday could be another day of big swings as Feder- al Reserve Chairman Ben Bernanke gives a highly anticipated speech at a con- ference in Jackson Hole, Wyo. Earlier Thursday, the government reported an increase in the number of What's your FAVORITE Tehama County "Hidden Gem?" A swimming hole, favorite hike, park site, fishing spot, Sunday drive, thing to do with kids? Share yours with us. If we use it in the October edition of first-time claims for unemployment benefits last week. The Labor Department said applica- tions for benefits rose to 417,000, the highest in five weeks. The figure was inflated by a strike at Ver- izon which ended earlier this week. His speech comes at a The S&P 500 index fell 18.33 points, or 1.6 per- cent, to 1,159.27. The Nas- daq fell 48.06 points, or 1.9 percent, to 2,419.63. The S&P 500, the benchmark for most money managers, has gained 3 percent this week but is still down 10 percent for the — Many on Wall Street hope Federal Reserve Chairman Ben Bernanke will unveil a new effort Fri- day to boost the economy in a highly anticipated speech in Jackson Hole, Wyo. Economists say a major new program is unlikely. But Bernanke will likely lay out the Fed's options for lowering long-term interest rates even further. pivotal moment for the U.S. economy. Growth has slowed. Stock prices have been gyrating. Europe is struggling to contain a spreading debt crisis. And analysts have been reducing their forecasts for growth this year and next. The situation resembles the one Bernanke faced last year. He responded at the annual economic confer- RANDAL S. ELLOWAY DDS IMPLANTS DENTISTRY 2426 SO. MAIN ST., RED BLUFF 530-527-6777 FACT SHEET ON DENTAL IMPLANTS DENTAL IMPLANTS: * are the most advanced tooth replacement system ever devised *help preserve jawbone to prevent the appearance of premature aging You'll receive a $25 Gift Certificate good at the Tehama County business of your choice. 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We would be pleased to evaluate your oral health and discuss treatment options with you. ence in Jackson Hole by suggesting that the Fed could buy more government bonds. The goal was to reduce long-term rates, stimulate spending and lift stock prices. The Fed began buying $600 billion in Treasurys in November and completed its purchases in June. Stock prices rose steadily through- out the bond-buying pro- gram. One reason few expect any such dramatic step this time is that just two weeks ago, Fed policymakers said they would keep short-term rates at record lows for two more years. ''It would seem strange for Bernanke to conclude so soon that this move was not $312.00 D NEWSAILY in Discount Coupons were published last week in the RED BLUFF TEHAMACOUNTY … And that does not Count all the ads offering percentage discounts, two-for-ones and Free-with-Purchase offers! Don't miss a Day of it! Subscribe Today 527-2151 It pays for itself. month. Thursday's drop broke a three-day rally in which the Dow gained 503 points. More than three stocks fell for every one that rose on the New York Stock Exchange. Trading volume was above average at 5 bil- lion shares. Few think Bernanke speech will signal major action WASHINGTON (AP) enough,'' Paul Dales, an economist at Capital Eco- nomics, said in a note to clients. Inflation is higher than it was last year, though still within the Fed's target range. But the Fed prefers to consider ''core'' inflation, which excludes volatile food and energy prices. Core prices rose 1.8 percent in July from July last year. That's twice the rate in July 2010, when the Fed was worried about deflation — a debilitating drop in prices and wages. Last month, Bernanke said the Fed would consider further steps if the threat of defla- tion returned. Bernake will likely out- line the challenges and explain why growth will probably stay weak for sev- eral years, analysts said.