NEW YORK (AP) - Wall Street stumbled through an uneven session and closed mixed Wednesday after Federal Reserve Chairman Alan Greenspan said he is unable to make a firm judgment about the health of the economy.
In testimony before Congress, Greenspan said economic signals remain mixed; his comments increased investors' recent fears about the economic recovery and sent stocks falling. But prices recovered as investors decided to take advantage of lower prices following three days of selling.
Investors were also cautious following Tuesday's reports of mad cow disease in Canada and by the U.S. government raising the national terror alert level to "orange," indicating a high risk for attacks.
Shaking off an early loss of 60.15, the Dow Jones industrial average closed up 25.07, or 0.3 percent, at 8,516.43, according to preliminary calculations. It was the Dow's first gain in four sessions, wiping out only part of a three-day loss of 221.78 points.
The broader market was mostly higher. The Standard & Poor's 500 index rose 3.69, or 0.4 percent, to 923.42. In its fourth straight decline, the Nasdaq composite index dipped 1.22, or 0.1 percent, to 1,489.87.
Investors have been collecting profits in recent sessions from the market's huge earnings-driven rally. They are concerned that stocks have become too pricey too soon and that a weakening dollar will further limit foreign investment.
Still, analysts are encouraged by signs of resilience in the market, including how most of Wall Street reversed earlier declines Wednesday. Selling has also been moderate aside from Monday's 185-point drop in the Dow. On Tuesday, amid upsetting news about mad cow disease and a greater risk of terrorism, the stock indexes posted extremely small losses and more stocks rose than fell on the New York Stock Exchange.
"The strength in the market is still there. We are looking at a market that still wants to go higher," said Peter Cardillo, president and chief strategist of Global Partner Securities Inc.
Meanwhile, other Wall Street observers predict the market will have trouble rallying further until there are new signs that the economy is rebounding and stocks are fairly priced.
"Lacking any clear evidence of a market bottom, any near term rally is likely to be, in our opinion, short lived," said Richard A. Dickson, senior market strategist, at Lowry's Research Reports in Palm Beach, Fla., in a market report released Wednesday.
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Among Wednesday's winners, McDonald's rose 35 cents to $17.30, recouping some of the $1.21 it lost Tuesday on fears of mad cow disease. Lehman Brothers also upgraded the company to "overweight" from "equal-weight," downplaying the severity of a situation in Canada, where officials said a cow was diagnosed with mad cow disease. Canadian officials said the animal, slaughtered Jan. 31, did not enter the food chain and its herd has been isolated for testing.
Hewlett-Packard rose 89 cents to $17.94, having reported earnings late Tuesday that beat analysts' expectations by 2 cents a share and confirmed Wall Street's estimates for the rest of the year.
But Cisco Systems declined 29 cents to $15.70 after Deutsche Securities lowered its recommendation on the networker to "hold" from "buy."
Eaton Vance fell $1.10 to $29.10 after the mutual fund and investment company released second-quarter earnings that missed analysts' estimate by 3 cents a share.
Advancing issues outnumbered decliners 4 to 3 on the NYSE. Volume was light.
The Russell 2000 index, the barometer of smaller company stocks, rose 1.70, or 0.4 percent, to 410.73.
Overseas, Japan's Nikkei stock average finished Wednesday down 0.5 percent. In Europe, France's CAC-40 inched up 0.1 percent, while Britain's FTSE 100 fell 0.9 percent and Germany's DAX index lost 0.4 percent.
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