U.S. stocks cut losses on Wednesday after Federal Reserve Chairman Ben Bernanke said in Congressional testimony that regulators do not plan anything like nationalization for Citigroup .

* Shares of Citigroup rose nearly 3 percent to $2.67. Before Bernanke's comments the stock was down more than 4 percent.

* Weighing on the market was disappointment that a major speech by U.S. President Barack Obama shed little new light on how he planned to stabilize the economy. Additionally, gloomy data pointed to more housing weakness.

* The Dow Jones industrial average <.DJI> was down 110.08 points, or 1.50 percent, at 7,240.86. The Standard & Poor's 500 Index <.SPX> was down 10.45 points, or 1.35 percent, at 762.69. The Nasdaq Composite Index <.IXIC> was down 21.06 points, or 1.46 percent, at 1,420.77.

(Reporting by Ellis Mnyandu; Editing by James Dalgleish)