Updated from 1:15 p.m. EDT

Bond prices rose for the second day in a row and the dollar briefly shot higher after Federal Reserve Vice Chairman Roger Ferguson indicated that surging energy costs will cut into economic growth but won't stop the Fed from hiking rates. Stocks, meanwhile, seemed to look past the Fed jawboning and were recently higher after overcoming early weakness.

By early afternoon Wednesday, a slew of other Fed speakers -- Fed Governor Donald Kohn, Cleveland Fed President Sandra Pianalto, New York Fed President Tim Geithner and Dallas Fed President Richard Fisher -- all confirmed that interest rates need to go higher.

"Obviously, we are considerably closer to where policy needs to be than we were sixteen months ago, but we are not yet at a point where we can stop and watch the economy evolve for a while," Kohn said.

Pianalto, who is not a voting member of the Federal Open Market Committee, added: "Removing the policy accommodation puts us in the strongest possible position to react as evolving economic conditions require."

The comments followed those made Monday evening by Fed Chairman Alan Greenspan and by San Francisco Fed President Janet Yellen on Tuesday.

Despite the steady drumbeat of Fed hawkishness, major averages rebounded from early weakness. Investors apparently digested disappointing guidance from tech bellwether Intel ( INTC) Tuesday after the close. Even Intel, which fell as much as 4% in morning trade, was recently down only 0.15, or 0.64%, at $23.57.

After trading as low as 10,232.98 early in the day, the Dow Jones Industrial Average was recently up 63.08 points, or 0.61% at 10,348.34. Strength in Altria ( MO) and Johnson & Johnson ( JNJ) was helping offset weakness in components Intel and Honeywell ( HON), whose earnings guidance also disappointed.

The S&P 500 was recently up 8.51 points, or 0.72%, at 1186.65 vs. its morning low of 1,170.85. The Nasdaq Composite was up 19.3 points, or 0.94%, at 2075.30 vs. its intraday low of 2,042.03.

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