Wall Street Pares Losses
Wall Street closed another difficult session lower but well above its worst losses Thursday after a late-day rebound in financial shares lifted many other stock sectors.
Investors still kept their distance from technology shares after a lackluster forecast from Cisco Systems Inc.
Stocks fell after Federal Reserve Chairman Ben Bernanke warned that a raft of economic troubles could dent business growth and after Cisco's comments touched off unease about business spending.
Bernanke, appearing before Congress' Joint Economic Committee with the Fed's economic forecast, warned of threats to the economy but didn't offer solid evidence the bank is prepared to further cut interest rates.
He stressed that the central bank was keeping all options open, saying the Fed would be closely watching economic growth and the threat of inflation.
Going forward, Bernanke said the Fed would not be "dogmatic" in what it might do.
"We will try to make judgments over time as we get more information," Bernanke said, adding at another point that there were a "lot of uncertainties" at present.
The slide seen during much of Thursday's session -- at one point the Dow had fallen another 200 points -- came a day after stocks tumbled amid concerns about continuing credit woes, a weakening dollar and rising oil prices.
There is a crisis of confidence from foreign investors losing faith in the U.S. economy and selling the dollar, which tumbled again today, and a crisis in housing that is only deepening, reports CBS News correspondent Anthony Mason.
"Unless we deal with the subprime crisis and the dollar, we can't save the economy from recession," said Peter Morici, an economist at the University of Maryland.
Investors had fresh reason for concern Thursday about toxicity within the credit markets. Morgan Stanley issued a detailed accounting of its exposure to subprime debt, pleasing investors by eliminating some of the uncertainty that has wracked Wall Street to varying degrees in recent months. But Morgan said late Wednesday its fourth-quarter profit could be reduced by $2.5 billion in write-downs related to troubles in the credit market, a reminder of the widespread damage from soured loans.
According to preliminary calculations, the Dow Jones industrial average fell 33.73, or 0.25 percent, to 13,266.29. The decline comes a day after the blue chips fell 360.92; Wednesday's decline was the third drop of more than 350 points in a month, offering the latest sign of how jittery many investors remain.
Broader stock indicators also came off their lows. The Standard & Poor's 500 index fell 0.85, or 0.06 percent, to 1,474.77, and the technology-heavy Nasdaq fell 52.76, or 1.92 percent, to 2,696.00.
Declining issues outnumbered advancers by more than 8 to 7 on the New York Stock Exchange, where volume came to a heavy 2.17 billion shares compared with 1.66 billion traded Wednesday.