Yahoo! Lifts Nasdaq, but Dow Declines

Bernanke cited several justifications for that assessment, including the fact that a number of "moribund" securitization markets remain, that risk spreads are still "quite elevated," and that pressures persist in short-term funding markets.

"Ultimately," he said, "market participants themselves must address the fundamental sources of financial strains -- through deleveraging, raising new capital, and improving risk management --and this process is likely to take some time."

On the corporate front, Wal-Mart's current-quarter outlook leaned to the lower end of expectations, even as its first-quarter profit grew by 6.9% to a better-than-expected $3.02 billion, or 76 cents a share. Shares dropped 2.4%.

Separately, the Commerce Department reported that retail sales, excluding cars, swelled by 0.5% in April, compared with the 0.2% economists' consensus. March data were revised upward to 0.4%. Keeping in the effects of declining auto sales, the numbers showed a drop of 0.2%, as expected.

Meanwhile, Hewlett-Packard confirmed that it will acquire Electronic Data Systems (EDS - Cramer's Take - Stockpickr). H-P said it will pay $13.9 billion in cash, or $25 a share, nearly a billion higher than the top end of the range cited by news reports yesterday. H-P shares slid 5.5% as EDS -- which surged in the prior session -- climbed another 1.1%.

Staying in the tech space, Yahoo! gained ground after CNBC reported that billionaire investor Carl Icahn may begin a proxy fight at the Internet-portal operator. According to people who have spoken with Icahn, he has recently accumulated as many as 50 million of the company's shares, the report said.