US STOCKS-Wall Street climbs as bears lock in gains

* Bernanke: Recovery weaker but Fed prepared to take steps

* Q2 GDP revised downward, but less than expected

* Intel warns of revenue shortfall but shares rise

* Indexes up 1.4 pct

* For up-to-the-minute market news see [STXNEWS/US]
(Updates to late afternoon, changes byline)

By Leah Schnurr

NEW YORK, Aug 27 (BestGrowthStock) – U.S. stocks (Read more about the stock market today. ) rose on Friday on
buying by investors holding short positions who locked in
profits after a revenue warning from a major technology company
and downbeat remarks by Federal Reserve Chairman Ben Bernanke.

Major indices fell sharply after Bernanke’s comments and
the warning by technology bellwether Intel Corp (INTC.O: ).

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.

“We’re sitting on important support and in thin markets you
don’t want to be leaning too far in one direction coming into a
very low volume week,” said Richard Ross, global technical
strategist at Auerbach Grayson in New York.

“If you were short the market throughout this month, you
made a nice profit, you want to lock that in.”

Despite Intel’s warning, its shares were up 1.5 percent at
$18.45 after falling earlier in the day to their lowest level
since July 2009. The chipmaker’s shares were down 15 percent in
the past five weeks. For details, see [ID:nN27260125].

“Even though the news is bad, the bad news is already in
the valuation. Obviously business isn’t going great there, but
the stock is so cheap this doesn’t matter,” said Stephen
Massocca, managing director at Wedbush Morgan in San
Francisco.

Shares in Intel were halted twice, once pending news and
once after the stock triggered a circuit breaker.

The Dow Jones industrial average (.DJI: ) rose 139.03 points,
or 1.39 percent, to 10,124.84. The Standard & Poor’s 500 Index
(.SPX: ) gained 14.47 points, or 1.38 percent, to 1,061.69. The
Nasdaq Composite Index (.IXIC: ) climbed 29.55 points, or 1.39
percent, to 2,148.24.

Nonetheless, the Dow and S&P 500 were on track for their
third week of declines in a row.

Bernanke told central bankers at a conference in Jackson
Hole, Wyoming, the recovery has weakened more than expected and
the central bank was ready to take further steps if needed to
spur the recovery. [ID:nN27259859]

The stock market started on a positive note after economic
growth was revised down in the second quarter, but the reading
was better than expected. The debate over whether the economic
recovery has hit a soft patch or is headed for a double-dip
recession has plagued the market. [ID:nN26193565]

Shares of 3PAR Inc (PAR.N: ) surged 24.9 percent to $32.50
after Hewlett-Packard Co (HPQ.N: ) again raised its buyout offer
for the data storage company, leapfrogging a bid from Dell Inc
(DELL.O: ). HP, a Dow component, fell 1 percent to $37.83, while
Dell rose 2.8 percent to $12.08. [ID:nASA00OW5]

(Additional reporting by Rodrigo Campos and Chuck
Mikolajczak; Editing by Kenneth Barry)

US STOCKS-Wall Street climbs as bears lock in gains