Mixed Day on Wall Street

Market analyst Larry Wachtel said the alternating declines and rallies this week should be taken with a grain of salt, given the meager volume headed into the Labor Day holiday weekend.

"To say the moves this week are a legitimate reading on the health of the market is wrong," he said. "The lack of volume makes everything inconclusive, and these large moves are bankrupt of any real meaning."

For the most part, this week has been about the Fed. On Tuesday, the minutes from the last Fed meeting did nothing to impress traders, who are hoping for a rate cut at or by the central bank's Sept. 18 meeting, but the Bernanke note a day later provided something of an offset.

Bernanke will deliver a speech on the subject of housing and monetary policy Friday in Jackson Hole, Wyo.

"Now investors will question the Fed's statements from here on in, as to whether or not they are being totally forthright," Marc Pado, U.S. market strategist with Cantor Fitzgerald, wrote in a statement.

Meanwhile, headlines out of the mortgage lenders continued to erode confidence. Thornburg Mortgage (TMA Quote), which has dropped nearly 55% in August, offered convertible preferred stock in order to fund existing loans. Thornburg grossed $500 million through the offering.

Thornburg finished with a gain of 65 cents, or 5.8%, to $11.81.

"This subprime problem isn't going away for a long time," said Wachtel. "This certainly reflects the fact that there are going to be some sad readings when banks and lenders report."