Stocks staged a late rally Tuesday as energy stocks made a comeback. But tech stocks fell after several downgrades.
Stocks see-sawed all day as traders juggled worries about Europe against encouraging comments from Fed Chairman Ben Bernanke.
The Dow Jones Industrial Average pushed higher with less than two hours on the clock. The blue-chip index lost over 115 points, or 1.2 percent, in the previous session.
The S&P 500was higher but the Nasdaqslipped. The CBOE volatility index, widely considered the best gauge of fear in the market, slipped to around 35.
“The markets are trying to stabilize after a fairly significant selloff,” and we're “treading water” in absence of any substantial economic news, said Alan Gayle, senior investment strategist for RidgeWorth Investments.
Gayle expects the sideways trend to continue until the fall and remains cautious on the market because of international uncertainties in Europe and China.
Meanwhile, Bernanke said he sees the economic recovery gaining momentum — enough to avoid a double-dip recession — but cautioned it won't be smooth sailing. The Fed chairman was speaking at the Woodrow Wilson International Center for Scholars, a nonpartisan research group.
"My best guess is we will have a continued recovery, but it won't feel terrific," Bernanke said, adding that economic growth won't be robust enough to drive down the unemployment rate, currently at 9.7 percent.
In Europe, finance ministers also attempted to restore market confidence by agreeing how to launch a massive anti-contagion program if necessary.
But it seems like each day brings a different country to worry about. Yesterday, it was Hungary. Today, it's Bulgaria. The EU has "some concerns" about Bulgaria, EU Economic Affairs Commissioner Olli Rehn said Tuesday.
The euro rose slightlybut was still near four-year lows against the dollar on Tuesday.
Citigroup and Bank of America advanced but Rochdale analyst Dick Bove cut his price target and earnings forecast on JPMorgan , saying the brokerage is "facing challenges in its business model almost everywhere."
This came after Bove last week slashed his price target and forecastfor Goldman Sachs .