NEW YORK (CNNMoney.com) -- U.S. stock futures turned higher after Fed chairman Ben Bernanke said the central bank has "a case for further action" to stimulate the economy, citing high unemployment and low inflation.
Dow Jones industrial average (INDU), S&P 500 (SPX) and Nasdaq (COMP) futures turned higher as Bernanke began speaking around 8:15 a.m. ET. Futures measure current index values against perceived future performance.
Markets have remained volatile as investors remain on edge amid rising optimism that the Federal Reserve will step in soon with another round of asset purchases to boost the economy.
"Consumer spending has been inhibited by the painfully slow recovery in the labor market," Bernanke said.
"Long-term inflation trends have been relatively stable [and] it seems likely that inflation trends will remain subdued for some time," he added, as he made the case for the Fed to take additional stimulus action.
"Bernanke has flashed the green light for a positive session today," said Peter Cardillo, chief market economist at Avalon Partners. "He was extremely transparent about the Fed making moves, which continues to invite risk."
The dollar, which is considered a safe-haven investment, was under more pressure after Bernanke's speech.
Stocks closed with modest losses Thursday, as concerns about investigations into foreclosure proceedings weighed on bank stocks.
Companies: Dow component GE (GE, Fortune 500) reported quarterly earnings Friday of $3.2 billion or 29 cents per share. Analysts were expecting the company to have earned 27 cents per share, up from 22 cents a year ago. But the company reported a bigger revenue drop than expected, sending GE's stock down about 2.7% in premarket trading.
After the closing bell Thursday, Google (GOOG, Fortune 500) reported quarterly profit and sales that rose from year-ago levels and beat Wall Street's forecasts. Shares of the tech giant were up 8.8% premarket.
Economy: Friday also brought a slew of economic reports.
The government released its latest report on the consumer price index, which is a measure of inflation. CPI is increased 0.1% in September, less than the 0.2% prediction from a consensus poll by Briefing.com.
Core CPI -- which strips out volatile food and gas prices -- stayed flat, while analysts expected it to have inched up 0.1%.
The Commerce Department also reported on retail sales before the start of trade. Sales gained 0.6% to $367.7 billion in September, compared with August's upwardly revised 0.7% jump. Economists had anticipated that September sales would grow 0.4%.
Afternoon reports include the University of Michigan's consumer sentiment index -- a reading on business inventories -- which will be released after the bell; and the Treasury Department's latest tally on the federal deficit due at 2 p.m. ET.
World markets: European markets were mostly higher in morning trading. Germany's DAX rose 0.3%, while the CAC 40 in Paris inched up 0.1%. Britain's FTSE 100 fell 0.4%.
In Asia, stocks closed mixed. The Hang Seng in Hong Kong fell 0.4% and Japan's Nikkei fell 0.9%. The Shanghai Composite gained 3.2%.
The dollar has been under increasing pressure amid the rising anticipation about the Fed taking action soon. A weaker dollar continues to underpin strengthening commodity prices. The dollar weakened even further after Bernanke strengthened the case for another round of asset purchase.
Gold futures for December delivery fell to $1,368 an ounce.
The price of oil fell 10 cents to $82.59 per barrel.
Bonds: The price rose on the benchmark 10-year U.S. Treasury, pushing the yield down to 2.5%.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.98%||4.07%|
|15 yr fixed||3.16%||3.24%|
|30 yr refi||3.99%||4.08%|
|15 yr refi||3.18%||3.24%|
Today's featured rates:
Legendary investor Bill Gross has reached an $81 million truce with Pimco, ending a war with the firm he built into the world's biggest bond manager. More
Republicans and the White House have been talking about the next big thing they'll address: tax reform. But their biggest focus seems to be tax cuts. More
For 25 years Miguel Caballero has been outfitting the world's VIPs with his stylish, bulletproof clothing line that shares his name. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
The New York property, which was the first home of the 45th president of the United States, was purchased on March 23 for $2.14 million -- a nearly 54% profit for the previous owner who bought it just month's earlier. More