A look at highlights from the day's business news:
Stocks slump on Bernanke comments
Stocks tumbled Wednesday after Federal Reserve Chairman Ben Bernanke told Congress that the outlook for the economy is "unusually uncertain," adding to worries about the pace of the recovery.
The Dow Jones industrial average lost 109 points, or 1.1%, the S&P 500 index dropped 14 points, or 1.3%, and the Nasdaq composite tumbled 35 points, or 1.6%.
Stocks were slightly lower through the early afternoon as
better-than-expected quarterly profit reports from Apple, Morgan Stanley and Wells Fargo were countered by disappointment about results from Yahoo and others.
But the selling picked up steam in the afternoon following the 2 p.m. ET
release of Bernanke's prepared testimony for a Senate committee. The Fed chief told lawmakers that, despite ongoing signs of weakness in the economy, central bankers expect gradual recovery over the next few years, although the labor market healing will be slower than previously thought.
"He's basically saying the economy is getting worse, and that while it's
still going to grow, it's not recovering at the pace they had hoped," said Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams.
Bernanke also provided more details on how the Fed plans to withdraw the trillions in stimulus it has pumped into the economy since the start of the financial crisis in 2008. But he also said that the Federal Reserve will be ready to provide additional help if the economy deteriorates.
Stocks found a little momentum Tuesday amid speculation that the Federal Reserve may take more steps to encourage bank lending. But that failed to transfer to Wednesday's trading despite a number of improved earnings.
Oil rises to 3-week high
Oil rose to its highest level in three weeks, nearing $78 a barrel, as signs of growing Chinese demand for energy and a cheerier Wall Street boosted prices.
Crude for August delivery rose 0.7% Monday and climbed 1.2% Tuesday to finish at the highest level since June 28, at $77.44 a barrel. But prices drifted 19 cents lower on Wednesday. The rise tracked gains in the stock market, as investors welcomed better-than-expected company earnings.
A report Tuesday from the International Energy Agency said that China
overtook the U.S. as the world's biggest energy user last year, and prospects for continued growth and rising energy demand are strong.
"Everyone has been so concerned about the U.S. economy, but the report on Chinese demand opened up traders' eyes to the idea that we shouldn't worry about every piece of economic data from the U.S., but instead take a global view," said James Cordier, president of Liberty Trading Group.
Oil futures, which switched to the September contract Wednesday,
continued to climb for a third straight session early Wednesday, crossing $78 a barrel. But prices slipped later in the day, after a government report showed a surprise build in crude inventories. Still, they held above $77 a barrel.
The Energy Information Administration reported that crude stocks climbed by 400,000 barrels last week, surprising analysts who were expecting inventories to fall by 1.6 million barrels, according to a consensus estimate collected by energy information provider Platts.
Treasurys climb on Bernanke's comments
Prices for U.S. Treasurys edged higher Wednesday, with the yield on the 2-year note holding at a record low, after Federal Reserve Chairman Ben Bernanke called the economic recovery "unusually uncertain."
The benchmark 10-year note rose 18/32 to 105-8/32 and its yield fell to 2.88% from 2.94% late Tuesday. Bond prices and yields move in opposite directions.
The 2-year note rose 2/32 to 100-4/32 with a yield of 0.57% - an
The 5-year note gained 7/32 to 101-3/32 and its yield was 1.65%.
The 30-year bond was higher by 1-19/32 to 108-15/32 with a yield of 3.9%.
With no economic reports on the agenda, investors focused on Bernanke's testimony on monetary policy before Congress Wednesday afternoon.
His comments that the economic recovery remains "unusually uncertain," spurred investors to buy up more government bonds, which are considered a low risk investment in times of economic uncertainty.
CNNMoney.com reporters Alexandra Twin, Hibah Yousuf and Ben Rooney contributed to this report.