Stocks were little changed on Thursday as Federal Reserve Chairman Ben Bernanke delivered congressional testimony for the second day and worries about hitting the U.S. debt ceiling dogged investors.
The three major U.S. stock indexes were well off their highs by late morning trade as the market interpreted the Fed chairman's comments as suggesting there would be no immediate or near-term stimulus to boost the economy.
There continues to be conflicting beliefs coming out from his comments. As of right now, with what the chairman said within the last two minutes ... there is going to be no further accommodation policy, said Ryan Larson, head of equity trading at RBC Global Asset Management in Chicago.
I think participants are using those comments as a reason to sell the market right now and take profits from yesterday.
In earnings-related news, JPMorgan Chase & Co
The Dow Jones industrial average <.DJI> edged up 8.93 points, or 0.07 percent, to 12,500.54. The Standard & Poor's 500 Index <.SPX> slipped 1.43 points, or 0.11 percent, to 1,316.29. The Nasdaq Composite Index <.IXIC> shed 12.09 points, or 0.43 percent, to 2,784.83.
At its session low, the S&P 500 touched 1,315.71 -- just a hair below the 1,316 support level.
The market had started off higher on JPMorgan results and a report showing new claims for U.S. jobless benefits fell slightly last week.
During his second day of the semiannual testimony, the Fed chairman renewed his promise that the central bank could put more monetary stimulus into play if the economic recovery stumbles.
But the market started selling off on some of Bernanke's comments, including not prepared at this point to take action, according to Peter Boockvar, equity strategist at Miller & Tabak + Co, in a note to clients.
The market also continued to worry about a deadlocked debate over U.S. budget cuts and raising the debt ceiling, which weighed on the market after Moody's announcement on late on Wednesday that it might cut the United States' prized triple-A credit rating. Moody's cited the increasing risk that Congress would not raise its $14.3 trillion debt ceiling in time to avert a default, which investors and experts say could roil financial markets.
The warning from Moody's came shortly after the ratings agency downgraded Portugal's debt to junk and as Europe's debt crisis appeared to be spreading.
The stock market has generally taken the debt ceiling wrangling in its stride and continues to do so -- judging by the lack of follow-through from the futures sell-off last night when Moody's action was announced.
In other earnings news, shares of Yum! Brands
Marriott International Inc
(Reporting by Angela Moon; Additional reporting by Aleksandra Michalska; Editing by Jan Paschal)