Stocks Flat on Bernanke Comments, Mixed Data

U.S. stocks were barely changed Thursday as comments from Federal Reserve Chairman Ben Bernanke about the strength of the economy kept investors cautious.

The Dow Jones industrial average was up 9.93 points, or 0.08 percent, at 12,751.79. The Standard & Poor's 500 Index was down 0.57 point, or 0.04 percent, at 1,454.73. The Nasdaq Composite Index was up 2.41 points, or 0.10 percent, at 2,490.79.

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The market erased earlier gains which had carried the Dow industrials to an intraday record high of 12,769.90.

In company news, disappointing earnings from oil field services company Baker Hughes Inc. (BHI) were offset by a rise in Anheuser-Busch (BUD) following a newspaper report the brewer could be in merger talks with Belgium's InBev.

Bernanke told the House Financial Services Committee the economy may be stronger than perceived because of strong consumer spending and income growth. If growth heats up, the Fed may not have room to cut interest rates or may even need to raise rates to stop inflation, a portfolio manager said.

"Today's comment goes to show the market is now perhaps worried that the Fed may have to keep an eye on capacity utilization and the impact it can have on inflation and potentially need to raise rates," said Sam Rahman, portfolio manager at Baring Asset Management Inc. "This tells you the market is jittery and schizophrenic."

Baker Hughes fell 8 percent to $65.57 while Anheuser-Busch rose 3 percent to $51.74.

The market jitters contrasted with Wednesday's rally after Bernanke's comment during Senate testimony that inflation was poised to ease while the economy would grow moderately.

A mixed batch of economic reports also kept the market moving sideways.

Import prices declined more than expected, a possible sign of easing inflation. However, a greater-than-expected rise in the New York Federal Reserve Bank's Empire State Manufacturing Survey added to fears of quickening inflation and rising interest rates.

Industrial output unexpectedly fell in January, dragged down by a drop in vehicle manufacturing while weekly jobless claims showed a bigger-than-expected increase.

Drug maker Biogen Idec (BIIB) reported fourth quarter profit that missed analysts' expectations, sending its shares down 2.1 percent to $49.44. The stock was the biggest drag on the Nasdaq.

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