NEW YORK — The stock market managed to steady itself Wednesday after hearing Federal Reserve Chairman Ben Bernanke’s plans to dismantle the central bank’s supports for the economy.
The Dow Jones industrial average closed with a loss of 20 points after falling nearly 100 in early trading. Treasury prices fell as demand for havens eased.
Bernanke revealed the Fed’s thinking on how to wean the market from emergency measures put in place to keep the economy afloat. He said the Fed will likely start tightening credit by boosting the interest rate it pays banks on deposits with the central bank.
The talk of a smaller role for the Fed in U.S. markets came as investors looked for the opposite overseas. Investors are hoping European Union countries will extend a bailout to Greece, which is facing big budget gaps. There is concern that financial woes in Greece, Portugal, Ireland and Spain could spread and threaten a global economic recovery.
“We’re in a messy transition period,” said Paul Ballew, chief economist at Nationwide Insurance in Columbus, Ohio. “While you see policymakers back off in some areas, you’re going to continue to see them intervene in other areas.”
The Dow fell 20.26, or 0.2 percent, to 10,038.38 a day after jumping 150 points as hope of a Greece bailout grew. The broader Standard & Poor’s 500 fell 2.39, or 0.2 percent, to 1,068.13, while Nasdaq composite fell 3.00, or 0.1 percent, to 2,147.87.
Officials said the EU member nations have made no decisions about how to help Greece. A gathering of EU officials is scheduled for today.
The European debt problems have added to a series of problems that have stalled a 10-month advance in stocks. Investors have also been concerned about China’s plans to curtail economic growth to avoid speculative bubbles.
