BERNANKE SEEKS GAINS FOR STOCK IN PUSH FOR JOBS:ECONOMY

Chairman Ben Bernanke is increasingly aiming for gains in stock prices as the Federal Reserve reaches for new tools to spur the three-year recovery and reduce unemployment stuck above 8 percent. Bernanke, setting the stage for a third round of quantiative easing in an August 31 speech in Jackson Hole, Wyoming, said the strategy works in part by loosting the price of assets such as equities. Higher stock and home prices would provide further impetus to spending by businesses and households. The Fed's large-scal asset purchases will probably lift stock by 3% over the two years following the September 13th announcement of QE3 as low yields on government bonds push investors into risker assets. They also estimate that QE will lift home prices by 2% over two years, assuming the Fed maintains purchases of Treasuries and mortgage debt through 2013. The gains in stocks and real estate could boost economic growth by 0.5% point over the next two years, enough to add about 500,000 jobs and cut the unemployment rate by 0.3%.