Updated from 4:15 p.m. EDT

Stocks in the U.S. endured another seesaw trading session Tuesday as questions and concerns about the credit markets and the role of the Federal Reserve continued to swirl.

The Dow Jones Industrial Average lost 30.49 points, or 0.2%, to 13,090.86, and the S&P 500 added 1.57 points, or 0.1%, to 1447.12. The Nasdaq was better by 12.71 points, or 0.5%, at 2521.30.

New York's major averages rose to their short-lived session highs at midday after Senate Banking Committee Chairman Christopher Dodd (D., Conn.) said Fed Chairman Ben Bernanke will take advantage of all the means he has to stabilize the markets.

He made his comments following a meeting with Bernanke and Treasury Secretary Henry Paulson. Some traders took that to mean a reduction in the fed funds target rate from the 5.25% level, where it has been for more than a year, could be on the horizon. Futures contracts indicate traders are uniformly expecting a cut in the near future.

Those hopes were stoked last week when the Fed unexpectedly lowered the discount rate, the rate it charges on loans to banks, by 50 basis points. The fed funds rate is the interest banks charge each other on overnight loans. Dodd said he didn't ask Bernanke to cut the fed funds target.

However, the move up was quickly halted by Richmond Fed President Jeffrey Lacker. Speaking in Charlotte, N.C., Lacker, who has a reputation for hawkish views, said the recent volatility wasn't necessarily a reason for a rate cut and that there is still room to be worried about inflation.

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