The Dow Jones industrial average had risen 150 points earlier in the session after Bernanke gave investors more reason to believe further interest rate cuts could be on the way. But the market gave back a big chunk of the gains, a fizzle that was perhaps to be expected after stocks' huge gains Tuesday and Wednesday. Nervousness about tech stocks, the result of weak results from Dell Inc., pulled the tech-dominated Nasdaq composite index down.

In a speech late Thursday, Bernanke said persistently tight credit conditions, the housing slump and high energy prices will probably create some "headwinds for the consumer in the months ahead," and the central bank will have to be "exceptionally alert and flexible."

The comments echoed those of Fed Vice Chairman Donald Kohn earlier in the week, which helped Wall Street recover some of its recent steep losses. Investors read Bernanke's words as a sign that the Fed is willing to lower interest rates again after cutting them at the past two meetings.

"Although the U.S. is in the eye of the credit storm, we've seen the Fed cut rates and we've heard from Bernanke that they're prepared to do so again if necessary," said Robert Jukes, global equity strategist at Collins Stewart in London.

The Fed meets again Dec. 11, and a rate cut could help reinvigorate the slowing economy. Evidence of a more reticent consumer came Thursday in a Commerce Department report that showed consumer spending rising a modest 0.2 percent in October, the slowest pace in four months.

The risk of rising inflation had been keeping the central bank cautious about loosening its policy. But that risk is looking less threatening now, given that oil prices have dipped below $90 a barrel for the first time since October and that the Commerce Department said core personal consumption expenditures have risen 1.9 percent year-over-year. Core PCE is one of the Fed's preferred inflation measures, and anything between 1 and 2 percent is considered a comfortable rate.

According to preliminary calculations, the Dow rose 59.99, or 0.45 percent, to 13,371.72.

Broader stock indicators were mixed. The Standard & Poor's 500 index rose 11.42, or 0.78 percent, to 1,481.14, and the Nasdaq composite index fell 7.17, or 0.27 percent, to 2,660.96.