Even as investors waded into riskier markets after a very tough August, traditional safe-haven gold hit a third consecutive all-time high near $1,900 after staging its biggest weekly gain in 2-1/2 years last week.

Speculation that the Federal Reserve could take new measures to boost the US economy helped support Wall Street stocks and gold after four weeks of losses but weighed on US bond prices.

Talk of possible new Fed stimulus follows weeks of market turmoil and persistent worries that the United States may fall back into recession. The threat that sovereign debt problems in euro zone peripheral countries could spread to the larger economies also contributed to volatility.

“The Fed is definitely on people’s minds, and you could argue that some of the bounce seen in high-yield commodity currencies is at least in part related to hopes for more policy measures,” said Wells Fargo strategist Vassili Serebriakov in New York.

Brent crude settled at $108.36, down 26 cents on the Libya news. But US crude oil settled higher on the New York Mercantile Exchange. Crude for September delivery expired and settled at $84.12 a barrel, up $1.86, or 2.26 percent.

“A resolution of the conflict is modestly bearish for crude oil prices, but it is less likely that we will get a $10-$20

drop in price of crude,” Jason Schenker, president at Prestige Economics LLC in Austin, Texas, said in a note.

On Wall Street, the Dow Jones industrial average was up 89.76 points, or 0.83 percent, at 10,907.41. The Standard & Poor’s 500 Index was up 5.65 points, or 0.50 percent, at 1,129.18. The Nasdaq Composite Index was up 12.43 points, or 0.53 percent, at 2,354.27.

Even with the day’s bounce, sharp volatility in the market underscored nervousness among investors.

The S&P has fallen more than 12 percent so far in August and is down 16 percent since July 22, roughly when the recent sell-off began.

“The rebound is pretty much focused on buying into some of the safer issues,” said Marc Pado, US market strategist at Cantor Fitzgerald & Co. in San Francisco. Shares of large-cap technology companies outperformed other shares, with IBM leading gains on the Dow. IBM was up 1.2 percent at $159.42.

Financials, seen as most vulnerable to the crisis in Europe, underperformed other sectors. Shares of JPMorgan Chase, were down 2.3 percent at $33.54 and the top drag on the Dow, followed by Bank of America, down 6.3 percent at $6.53.

The cost for euro zone banks to borrow money from one another rose again, heading back toward their highest levels since late 2008 as US banks remained wary of lending to European counterparts in the face of the intractable debt crisis.

The MSCI world equity index was flat. The index has fallen for five weeks in a row and appears headed for its worst monthly performance since October 2008, when markets were reeling after the collapse of Lehman Brothers.

The FTSEurofirst 300 index of top European shares rose 0.8 percent to close at 916.78, having risen as high as 933.35.

Additional bond purchases by the Fed could help reflateasset prices, but many view the chances of a third round of quantitative easing as limited and expect the Fed to take gradual measures to boost the economy.

Strategists said Fed Chairman Ben Bernanke may hint at more emergency stimulus for the economy when the Fed hosts its annual retreat in Wyoming this week.

The speculation also put some early pressure on the dollar. But the US currency was last up 0.1 percent against a basket of major currencies.

The benchmark 10-year Treasury note was last down 9/32 in price, yielding 2.09 percent versus Friday’s close of 2.10 percent.

Spot gold was up 1.6 percent at $1,888.90 an ounce, having earlier hit a record $1,894.10.

“Gold is driven by the expectation that at some point inflation will come back, and a continuation of people looking for a safe haven beside just the US Treasury bonds,” said Leo Larkin, metals equity analyst at Standard & Poor’s.