By Steven C. Johnson
NEW YORK (Reuters) - The Dow and S&P 500 edged lower on Wednesday as uncertainty about when Congress might approve a proposed $700 billion financial sector bailout offset Warren Buffett's $5 billion bet on Goldman Sachs.
Fear that congressional wrangling could delay or weaken the Bush administration's plan to mop up bad mortgage debt from banks' balance sheets kept stocks in check throughout the day.
The Nasdaq, though, clung to slender gains on hopes that technology spending would increase once a version of the bailout plan becomes law. The Dow and S&P declined for the third straight day.
Federal Reserve Chairman Ben Bernanke urged Congress' Joint Economic Committee to pass the bailout, saying delay would keep lenders from extending credit to households and businesses, but lawmakers voiced doubt about the size and scope of the plan.
"The resistance we're seeing in Washington (to the bailout bill) is understandable, but frightening at the same time. The longer this drags on and the more bickering we see, the more frightening it is," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.
The Dow Jones industrial average <.DJI> was down 29.00 points, or 0.27 percent, at 10,825.17. The Standard & Poor's 500 Index <.SPX> was down 2.35 points, or 0.20 percent, at 1,185.87. The Nasdaq Composite Index <.IXIC> was up 2.35 points, or 0.11 percent, at 2,155.68.
Despite uneasiness about the bailout, traders said Buffett's decision to invest $5 billion in Goldman Sachs
"When Buffett jumps in the pool, others may follow," said Andre Bakhos, president of Princeton Financial Group in Princeton, New Jersey. "That says to investors that all is not lost."
But shares of Citigroup
Overall sentiment on Wednesday toward financial shares, the hardest-hit sector throughout the year-long credit crisis that has rattled Wall Street, was mixed.
"Whether Buffett has called a bottom, I don't think anyone knows," said Ablin. "My bottom line is, yes, financial stocks are as cheap as they've ever been, relative to the rest of the market. Problem is, the same was true last October."
Among Nasdaq gainers, software maker Oracle Corp
The market got a brief lift from reports suggesting the Bush administration might accept curbs on executive pay as a condition for passage of the bailout, as insisted upon by Democrats, but a Treasury Department source told Reuters no such deal had been reached.
About 1.08 billion shares changed hands on the New York Stock Exchange, well below last year's estimated daily average of roughly 1.90 billion, while on Nasdaq, about 1.81 billion shares traded, also below last year's daily average of 2.17 billion.
Declining stocks outnumbered advancing ones on the NYSE by a ratio of about 3 to 2. On the Nasdaq, decliners beat advancers by about 2 to 1.
(Additional reporting by Ellis Mnyandu; Editing by Jan Paschal)
