Wall Street slips as it rethinks Bernanke comments
NEW YORK (Reuters) - Stocks fell on Thursday as investors reassessed comments by the Federal Reserve chairman about economic stimulus and semiconductor shares weakened.
During a second day of testimony about the economy, Fed Chairman Ben Bernanke reiterated the U.S. central bank would be ready to inject more money should the economy worsen. But he told a U.S. Senate committee that the time had not come yet and noted inflation had picked up since late 2010.
Stocks had climbed on Wednesday as investors took Bernanke's remarks before a House panel as signaling more possible stimulus for the economy if the outlook worsens.
"After yesterday's appearance ... it seemed a little more likely they would step in and he's throwing cold water on it now ... I think people read into it far too much yesterday," said Kim Caughey, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
The Dow Jones industrial average was down 50.82 points, or 0.41 percent, at 12,440.79. The Standard & Poor's 500 Index was down 8.49 points, or 0.64 percent, at 1,309.23. The Nasdaq Composite Index was down 34.07 points, or 1.22 percent, at 2,762.85.
Technology stocks were Thursday's top decliners, continuing their losing streak for a second day. The Nasdaq was down more than 1 percent and the Merrill Lynch Semiconductor HOLDRS Trust lost 1.2 percent, near its 200-day moving average.
The market had started off higher on positive JPMorgan results and a report showing new claims for U.S. jobless benefits fell slightly last week.
Google Inc shares slipped 1.7 percent to $529.14 ahead of its earnings report after the bell.
JPMorgan Chase & Co shares rose 2.1 percent to $40.46 after the bank reported a higher-than-expected profit as it wrote off fewer bad mortgages and credit card loans.
Worries about a deadlocked debate over U.S. budget cuts and raising the debt ceiling further soured investor sentiment.
In Thursday's appearance before the Senate Banking Committee, Bernanke warned that overzealous cuts to government spending in the short term could derail an already fragile recovery and said a U.S. debt default may wreak financial havoc.
Moody's announced 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 stock market has generally taken the debt ceiling wrangling in its stride.
In other earnings news, Marriott International Inc shares fell 7.8 percent to $34.27 as the U.S. hotel chain reported higher quarterly earnings that matched analysts' estimates and gave a tepid forecast for the year, also late on Wednesday.
(Reporting by Angela Moon; Editing by Kenneth Barry)