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His opening remarks will be widely watched by financial markets hoping for some indication the central bank is prepared to step in to support an economic recovery that appears at risk of stalling.

Bernanke, however, is unlikely to announce a third round of Fed bond buying. The Fed has already bought $2.3 trillion in longer-term securities -- a policy known as quantitative easing. Its most recent program, dubbed QE2, ended in June.

But he is likely to acknowledge the economy's strains, and may show a willingness to take other, relatively modest, steps to shore up the recovery.

"If people in the marketplace think he's going to announce QE3, they're going to be disappointed," said Bank of America Chief Economist Mickey Levy, speaking in the lobby of the Jackson Lake Lodge, where the annual retreat is being held.

The U.S. economy braked sharply in the first half of the year, expanding at less than a 1 percent annual rate. Analysts do not believe it is faring much better now.

At the same time, Europe is strangled by a debt crisis, and both major economic zones appear at risk of recession.

As gloomy news on the U.S. economy mounted in recent weeks, stock markets plunged and speculation the Fed would crank up its crisis-fighting operation grew. The yield on the 10-year Treasury note hit a new low.

So far in August, the Standard & Poor's 500 Index has fallen 10 percent -- a figure that papers over some of the gut-wrenching daily drops and mind-bending volatility.

However, stock market investors spent much of this week driving share prices higher on the premise that the Fed would have to begin to snap up more bonds to push borrowing costs lower. The S&P rose nearly 5 percent through Wednesday before the reality began to set in on Thursday that Bernanke was unlikely to lay out any bold policy initiatives.

A BALANCE SHEET FIX

While Bernanke is expected to stop short of offering a grand economic fix, he may well signal a willingness to adjust the central bank's $2.8 trillion portfolio to try to get more bang for each buck.

Fed officials have discussed buying more longer-term debt and selling short-term securities, an operation that could increase downward pressures on long-term interest rates without further bloating the central bank's balance sheet.

Beyond providing a psychological boost, lower long-term rates could encourage home and car purchases, and business investments.

"These are small moves," said Wells Fargo economist John Silvia, one of many conference attendees milling about the lodge before the start of the conference on Thursday. "This is not the time to put up full sails."

Even some Fed policymakers admit changing the Fed's holdings to twist down the longer end of the interest rate curve might do little good.

"A twist operation would not have every much effect. It's been analyzed many times," St. Louis Federal Reserve Bank President James Bullard told Reuters on the conference sidelines.

A FISTFUL OF DOLLARS

Over the last five turbulent years, Bernanke has used his speeches at Jackson Hole to assure the public the Fed stood ready to come to the economy's aid.

Last year, he laid groundwork for the Fed's November decision to launch a second bond-buying spree. Although there will be no less attention to his remarks this year, conditions have changed.

Inflation is higher and the risk of a vicious deflationary cycle is lower. While growth is weak, Fed officials do not appear particularly concerned about recession risks.

"We will continue on this modest growth path as we go forward," said Kansas City Fed President Thomas Hoenig. "It's not exciting, but it's not a recession.

However, a series of regional factory surveys have suggested manufacturing sector, which has powered the recovery, may be contracting, and jobs growth continues to fall short of what is needed to lower an unemployment rate stuck above 9 percent.

In addition, sovereign credit strains in Europe have not gone away, adding to an overall sense of uncertainty many think is keeping consumers and businesses on the sidelines.

With that as a backdrop, economists increasingly think further Fed easing may not be far off.

(Reporting by Mark Felsenthal; Editing by Leslie Adler)

U.S. Federal Reserve Chairman Ben Bernanke is due to address central bankers at an annual symposium in Jackson Hole, Wyoming, at 1400 GMT. His speech last year laid the groundwork for the Fed's $600 billion bond-buying program to revive the economy.

Bernanke is unlikely to announce a third round of bond buying. The Fed has already bought $2.3 trillion in longer-term securities, a policy known as quantitative easing. Its most recent program, dubbed QE2, ended in June. But he could acknowledge the economy's strains and may show a willingness to take other, relatively modest, steps to shore up the recovery.

James Bullard, president of the St. Louis Fed, said on Thursday that a bid by the Fed to lower long-term interest rates further by rebalancing its portfolio would probably not have much impact.

The Commerce Department will release its second reading of U.S. second-quarter GDP data at 8:30 a.m. EDT, with economists forecasting a 1.1 percent annualized pace of growth, against 1.3 percent growth in the first reading.

North Carolina braced on Friday for a direct hit from Hurricane Irene, cities along the U.S. east coast were on alert and millions of beach goers cut short vacations to escape the powerful storm.

Preliminary second-quarter corporate profits data is due at 8:30 a.m. EDT. In the revised Q1 report, corporate profits rose 1.2 percent.

American International Group (AIG.N) Chief Executive Robert Benmosche has complained to senior executives at investment banks about the "unfavorable research" of the insurer's stock, the Wall Street Journal said, citing people familiar with the matter.

At 9:55 a.m. EDT, Thomson Reuters/University of Michigan Surveys of Consumers release the August final consumer sentiment index. Economists in a Reuters survey expect a reading of 56.0 compared with 54.9 in the preliminary August report.

Luxury jeweler Tiffany & Co (TIF.N) is due to announce results.

The top official behind Standard & Poor's downgrade of the United States said on Friday it was not to blame for August's stock market rout, and warned that developed nations still needed to "get their act together" to tackle their mountains of debt.

European shares .FTEU3 fell 0.7 percent in early trade on Friday on nervousness ahead of Bernanke's speech, while Japan's Nikkei stock average .N225 rose 0.3 percent on bargain-hunting.

The Dow Jones industrial average .DJI dropped 170.89 points, or 1.51 percent, to 11,149.82 on Thursday. The Standard & Poor's 500 Index .SPX fell 18.33 points, or 1.56 percent, to 1,159.27. The Nasdaq Composite Index .IXIC lost 48.06 points, or 1.95 percent, to 2,419.63.

(Reporting by Atul Prakash; Editing by Hans-Juergen Peters)

Stocks on Wall Street fell on Thursday as investors lowered their expectations that Bernanke, who is due to address central bankers at an annual symposium in Jackson Hole, Wyoming, will announce drastic measures to kickstart growth in the world's top economy.

His speech last year laid the groundwork for the Fed's $600 billion bond-buying program to revive the economy under the rubric "QE2" for the Fed's second round of stimulus, or quantitative easing.

While investors have speculated Bernanke could signal a new monetary offensive in his talk, many analysts say he could well disappoint those looking for major measures, such as a QE3.

"The market is lacking upside potential as some doubt there will be another round of quantitative easing from the Fed," said Lee Suk-won, a market strategist at E-Trade Securities.

The Nikkei 225 index .N225 edged up 0.04 percent, while the broader MSCI Asia Pacific ex-Japan index .MIAPJ0000PUS also gained 0.1 percent.

The U.S. dollar rose to 77.39 against the yen, up 0.7 percent, after a rise in U.S. jobless claims and more volatility in euro zone debt market added to investor nervousness.

Brent crude edged up 0.15 percent to $110.88 per barrel, while gold fell 0.2 percent to $1,766.3.

(Additional reporting by Ju-min Park; in Seoul; Editing by Daniel Magnowski)

In announcing he could no longer fulfill his duties and would resign as chief executive, Jobs made headlines worldwide and raised questions about the future of a $350 billion company that revolutionized computing and consumer electronics.

One headline, in Brazil's O Globo newspaper, declared: "Steve Jobs created our world."

Investors took the shift in stride, expressing confidence in Apple's product pipeline, managers and newly appointed CEO Tim Cook, who promised the company would stay the course.

"Steve built a company and culture that is unlike any other in the world and we are going to stay true to that -- it is in our DNA," Cook, 50, wrote in a memo to staff.

Shares closed down less than 1 percent at $373.62 and outperformed the major stock indexes. Shares are up nearly 57 percent in the past year and remain a favorite of analysts even in the absence of Jobs. At least 13 brokerages maintained their stock price targets in research notes issued Thursday.

Often mentioned in the same breath as Henry Ford, Thomas Edison or Walt Disney, Jobs is credited with bringing Apple back from the brink of disaster. Since his return to Apple in 1996, after an absence of more than a decade, the company's stock price has climbed roughly 9,000 percent.

In recent years, Jobs' battle with pancreatic cancer has been of deep concern to Apple fans and investors. Jobs, 56, who has been on medical leave since January, will become chairman.

"Over the course of last year, investors have become more comfortable with the idea of life after Jobs," said Edward Jones analyst Bill Kreher. "I think it is encouraging that he will remain with the company as chairman, but the real story is that Tim Cook has emerged as a capable successor."

Cook, a former Compaq executive and an acknowledged master of supply-chain management, has taken over the helm in each of Jobs' three health-related absences, including his most recent one starting January 17.

His first big test could come as early as next month, when, according to a source, Apple is planning to introduce the iPhone 5 -- the sort of occasion that Jobs the showman could turn into a spectacle.

Cook, who was chief operating officer, is typically more low-key in public and around the office, according to those who have worked for him.

"Tim is an extremely analytical, methodical leader, data-driven, objective and unemotional," said one former Apple executive. "That is in contrast to his former boss."

Jobs briefly emerged from his leave in March to unveil the latest version of the iPad and later to attend a dinner hosted by President Barack Obama for technology leaders.

Yet his gaunt appearance sparked questions about how bad his illness was, and his ability to continue at Apple.

"I will say to investors: 'Don't panic and remain calm -- it's the right thing to do. Steve will be chairman and Cook is CEO," said BGC Financial analyst Colin Gillis.

Jobs did not give details on the state of his health. But oncologists who have not treated the Apple founder said he could be facing several problems tied to his rare form of pancreatic cancer and subsequent liver transplant.

Such problems include possible hormone imbalances or a recurrence of cancer that is harder to fight once the body has been weakened.

Jobs' privacy when it came to health matters often frustrated investors and employees. Even board members have confided to friends their concern that Jobs, in his quest for privacy, was not being forthcoming with directors about the true condition of his health.

"I think a lack of clarity of its succession plan in the past has been a distraction so we appreciate that this plan represents a smooth and orderly transition," Edward Jones' Kreher said.

As Apple chief, Jobs earned a reputation for commanding every aspect of operations -- from day-to-day running to broad strategic decisions. Even the front yard of his home in Palo Alto, California, is dotted with Apple trees.

In the process, he won widespread respect from rivals and drew comparisons to other iconic business leaders.

"As a competitor, Jobs has clearly raised the bar for all of us in the industry and helped reset what personal computing is," said Todd Bradley, executive vice president of Hewlett-Packard's Personal Systems Group.

"At the same time, Steven's board have built a transition plan and we will continue to view them as an aggressive competitor."

(Additional reporting by Bill Rigby, Alexei Oreskovic, Sarah McBride and Jim Christie in San Francisco; Edwin Chan, Lisa Richwine and Nichola Groom in Los Angeles; Peter Lauria, Liana B. Baker, Jennifer Saba and Tiffany Wu in New York; Brian Winter in Sao Paulo; Tarmo Virki in Helsinki; and Georgina Prodhan in London)

(Editing by Maureen Bavdek, Derek Caney and Robert MacMillan)

Technology shares will be in focus after Jobs resigned and passed the reins to his right-hand man Tim Cook, saying he could no longer fulfill the duties.

Apple shares fell 7 percent in after-hours trade on Wednesday, while its stocks traded in Frankfurt were down 4.8 percent. Apple has the biggest effect on the Nasdaq 100's daily moves, as it accounted for more than 14 percent of the index at the end of trading on Wednesday, according to Reuters data.

The Labor Department releases first-time claims for jobless benefits for the week ended August 20 at 8:30 a.m. EDT. Economists in a Reuters survey forecast a total of 405,000 new filings compared with 408,000 in the prior week.

AT&T said on Wednesday the Federal Communications Commission had requested more information about its acquisition of T-Mobile in relation to its commitment to expand high-speed wireless services to 97 percent of all Americans.

The Obama administration is working on proposals to prop up the weak U.S. housing market and may back a plan to refinance government-backed mortgages at today's lower interest rates, the New York Times reported, citing two people briefed on the discussions.

Companies reporting results include Hormel Foods and Big Lots.

European shares rose 1 percent on Thursday, extending a rally into a fourth day as speculation grew that U.S. Federal Reserve chairman Ben Bernanke would announce stimulus measures for the struggling U.S. economy on Friday. Japan's Nikkei average rose 1.5 percent.

Bernanke was due to address central bankers at an annual symposium in Jackson Hole, Wyoming, on Friday. His speech last year laid the groundwork for the Fed's unprecedented $600 billion bond-buying program, known as quantitative easing or QE2, to revive a sputtering U.S. economy.

U.S. stocks rallied for a second day on Wednesday. The Dow Jones industrial average shot up 143.95 points, or 1.29 percent, to end at 11,320.71. The Standard & Poor's 500 Index jumped 15.25 points, or 1.31 percent, to finish at 1,177.60. The Nasdaq Composite Index gained 21.63 points, or 0.88 percent, to close at 2,467.69.

(Reporting by Atul Prakash; Editing by Dan Lalor)