Bullish before Bernanke

LONDON (CNNMoney.com) -- U.S. stock futures were stronger Friday on growing hopes that the subprime mortgage storm may soon calm and a highly anticipated speech by Federal Reserve Chairman Ben Bernanke.

At 8:31 a.m. ET, Nasdaq and S&P futures were higher, pointing to solid gains for stocks at the open.

The focus for financial markets will be a speech Bernanke is due to give at the Fed's annual symposium in Jackson Hole, Wyoming at 10 a.m. ET.

Bernanke is set to speak about monetary policy and housing. Investors will be looking for clues as to whether the Fed plans to cut the target for its key short-term interest rate soon.

Traders are hoping for a rate cut, which could give investors a boost of confidence and help restore calm to the markets. But there are concerns the Fed will keep its focus on containing inflation and not bail out investors.

A report released before the market open that showed inflation to be tame could give the Fed more flexibility to lower rates. An inflation measure in the government's personal income and spending report rose 0.1 percent on a monthly basis in July, slightly below the 0.2 percent gain economists surveyed by Briefing.com had expected.

The inflation measure, known as the core PCE index, is closely watched by economists, including those at the Fed. While inflation edged slightly higher, consumer spending rebounded. The report showed personal income rose 0.5 percent and spending rose 0.4 percent in July.

Upbeat sentiment was sparked by news that President Bush will outline a plan aimed at resolving problems in the subprime mortgage sector, which has been the source of turmoil in the financial markets.

At 11 a.m. ET, the President will discuss proposals for helping troubled mortgage holders keep their homes as well as reforms for preventing a similar crisis from breaking out in the future.

The jam-packed day comes during what is usually a quiet period for Wall Street and ahead of a long weekend. U.S. markets will be closed Monday for Labor Day.

A string of economic readings are still on tap, including the Chicago PMI, a regional manufacturing report; a reading on factory orders; and a revision to the University of Michigan's Consumer Sentiment Index.

In major corporate news, PC maker Dell (Charts, Fortune 500) reported a rise in quarterly profit late Thursday, helped by a decline in costs.

Mc-Graw Hill (Charts, Fortune 500) said that Standard & Poor's President Kathleen Corbet has been replaced. The change comes as credit-rating agencies have come under fire for failing to warn investors about problems in the mortgage sector.

Global markets cheered news of the Bush plan. Major Asian markets rallied, although volume was light. European stocks gained in early trading.

Treasury prices eased, raising the yield on the benchmark 10-year note to 4.55 percent from 4.51 percent late Thursday. Bond prices and yields move in opposite directions.

Oil prices turned higher, with U.S. light crude for October delivery adding 46 cents to $73.82 a barrel in electronic trading.