Following a strong start on the back of some upbeat manufacturing data, US benchmarks were mixed by the close after comments by Federal Reserve Chairman Ben Bernanke.

In defending the Fed's latest decision to launch a third round of quantitative easing, Bernanke said that the US economy "simply has not been growing fast enough recently to make significant progress in bringing down unemployment."

Speaking at the Economic Club of Indiana, he said: "We hope that, by clarifying our expectations about future policy, we can provide individuals, families, businesses, and financial markets greater confidence about the Fed's commitment to promoting a sustainable recovery and that, as a result, they will become more willing to invest, hire and spend."

ISM beats expectations


Stocks gained strongly after the ISM's manufacturing gauge rose from 49.6 to 51.5 in September, its best level since May and above the 49.7 consensus estimate. "The number, at 51.5, shows significant growth compared to forecasts, potentially illustrating a forthcoming uptick in the broader US economy," said financial trade David White from Spreadex.

Meanwhile, construction spending declined by 0.6% in August, compared with a 0.5% rise expected by analysts.

In other news, Friday's release by Oliver Wyman on the Spanish financial sector was among the factors lifting sentiment early on today. The independent auditor estimated that banks would need €59.3bn in funds in order to stay afloat, well within the €100bn limit given by the European Union.

Company movements


Technology group Oracle was higher after inaugurating its annual Open World conference over the weekend.

Ceramic products firm Ceradyne surged after 3M launched a $860m offer for the group, equal to $35 a share.

Goldman Sachs advanced after Barron's reported that the stock will rise as much as 25% within a year as capital markets improve.

Monster Worldwide, the Internet recruiting service that is exploring a sale, gained on reports that it is in talks with a private equity bidder.

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