Stocks struggled — and lost — Wednesday as traders mulled a possible bailout of Greece and the Fed's exit strategy after comments from Fed Chief Ben Bernanke.
The Dow Jones Industrial Average lost 20.26, or 0.2 percent, to close at 10,038.38, after logging its biggest one-day percentage gain in three months on Tuesday. The S&P 500 shed 0.2 percent and the Nasdaq fell 0.1 percent.
Energy and industrials were some of the weakest components on the Dow, including DuPont and Caterpillar and Chevron .
Oil prices rose for a third straight day, closing above $74 a barrel, but commodity stocks were weak as companies in the sector are bearish on prices and are offering soft outlooks.
The dollar rose, continuing to benefit from uncertainty in Europe.
Talks are apparently going on in Europe about a possible bailout for debt-riddled Greece. The French daily Le Monde wrote that France and Germany are expected to present a bailout plan at an EU summit Thursday. But there's no clear EU policy on such a measure, which left a lot of uncertainty — and markets hate uncertainty.
But, that doesn't mean you can't trade it.
"I still think we’re in the beginning of a bull phase," Jeff Mortimer of Schwab Investment Management said on CNBC today. His advice for investors? "Have a buy-the-dip mentality,"Mortimer said. "Increase equity exposure — on the pullbacks."
As Wall Street dug out from a winter blizzard, the one-year anniversary of the government bailout of the financial sector slipped by with little fanfare.
Treasury Secretary Tim Geithner issued a statement on the recovery, timed for the anniversary. He urged Congress to pass the president's"Financial Crisis Responsibility Fee,"suggesting that, if it goes through, then "Americans will not have to pay one cent for TARP."
Earlier, Bernanke rattled the market after he said, in prepared testimony, that low rates are warranted for an extended period but said that the Fed's unwinding may begin with the discount rate, the rate the Fed charges banks, which has remained at 0.5 percent since Dec. 2008.
The market had initially interpreted that as a sign that monetary-policy tightening was coming but as analysts and economists mulled over the report, the less convinced they were that he was signaling tightening.
"[T]he likely near-term hike in the discount rate 'should not be interpreted' as a policy signal," Ian Shepherdson, chief U.S. economist at High Frequency Economics, wrote in a note to clients.
Bernanke's testimony was postponed due to the snowstorm in the Northeast but the text of the testimony was released at 10am ET.
