Stocks Can't Shake Financial Worries

Overall, stocks' breadth was poor. Roughly 2.15 billion shares changed hands on the New York Stock Exchange, with declining issues outpacing advancers by a 3-to-2 margin. Volume reached 2.17 billion shares on the Nasdaq as losers topped winners 5-to-4.

Equity measures had started off higher today after Bernanke highlighted the harmful weakness of the dollar in a speech in Madrid, Spain, which seemed to signal that the central bank will indeed pause its rate-cutting campaign. "Over time," he said, "the Federal Reserve's commitment to both price stability and maximum sustainable employment and the underlying strengths of the U.S. economy -- including flexible markets and robust innovation and productivity -- will be key factors ensuring that the dollar remains a strong and stable currency."

The U.S. dollar ramped up following those remarks, though the gains tapered off a bit toward the end of the session. The greenback firmed by 0.5% against both the euro and the yen to close at $1.5467 and $104.86, respectively.

Win Thin, senior currency strategist with Brown Brothers Harriman, noted that Bernanke's stated concern on the dollar is unusual. "If nothing else, these dollar comments do suggest that the Fed, while on extended pause right now, remains concerned about price pressures even though Bernanke acknowledged 'downside risks' until house prices stabilize," he wrote.

Paul Nolte, director of investments with Hinsdale Associates, noted that the Fed chief's remarks seemed to prop up the greenback but said, "I don't anticipate that the dollar is done bottoming out, and we go straight up from here because Bernanke said so."