NEW YORK — Investors didn't hear what they wanted from Federal Reserve Chairman Ben Bernanke.
An early rally in stocks faded in the afternoon Thursday after Bernanke signaled no immediate further steps from the Fed to stoke economic growth in the United States, which has shown signs of faltering.
A report that Americans cut back sharply on their credit card purchases in April, suggesting consumers were losing confidence in the economy, also took some steam out of the market.
Bank stocks also lost ground late in the day after the Fed said it wants U.S. banks to set aside more money to cushion against unexpected losses, a key step in preventing another financial crisis.
The Dow Jones industrial average had been up as much as 140 points but closed up 46.17 points, or 0.3 percent, at 12,460.96.
"The market is addicted to easy money, and Bernanke has the job of not pulling the trigger unless the situation needs stabilizing," said Doug Roberts, chief investment strategist at the investment company Channel Capital Research.
Bernanke told a joint economic committee in Congress that the Fed was ready to act if the economy needs it, but he did not spell out any additional steps on the way.
The Fed chairman said the central bank was "prepared to take action as needed to protect the U.S. financial system and economy in the event that financial stresses escalate."
Weaker hiring in May and comments by a Fed regional president had led some investors to hope that the Fed might try something new. The stock market enjoyed its biggest rally of the year on Wednesday.
On Thursday, the early rally in stocks came after China cut its benchmark lending rate for the first time in nearly four years, adding to efforts to reverse a sharp slowdown in economic growth there.
"China is the world's economic locomotive at the moment, and it can't afford to slow down at a time when other major economies are in precarious positions," said Matthew Kaufler, portfolio manager at mutual fund group Federated Investors.
The broader stock market drifted lower during the afternoon as well. The Standard & Poor's 500 index ended down 0.14 point at 1,314.99. The Nasdaq composite index finished down 13.70 points at 2,831.02.
Industrial stocks that rely heavily on the Chinese market for sales were among the biggest gainers on the New York Stock Exchange. Heavy equipment maker Caterpillar rose 48 cents to $87.14.
The price of gold, which since 2009 has often surged as the Fed has bought bonds to stimulate the economy, fell almost 3 percent after Bernanke's testimony. Gold declined $46 an ounce, the biggest decline since April, to $1,588.
Gold tends to fall when traders expect the value of the dollar to rise, which is a likely outcome if the Fed doesn't take steps to keep interest rates low, like buying government bonds.
On Friday, after the government reported that the country created only 69,000 jobs in May, gold rocketed $58 an ounce, partly because investors believed the Fed might step in.
The sharp moves up and down aren't likely to stop until there's a clear answer from the Fed, said Jon Nadler, senior analyst at Kitco Metals. That may take until June 20, when the Fed holds its next policy meeting.
"This is a market built on anticipation and little else," he said.
Michelle Girard, senior U.S. economist with Royal Bank of Scotland, said the Fed may extend a program called Operation Twist, in which it sells short-term securities and buys long-term bonds to drive down long-term interest rates, for a few months. That program is set to expire at the end of this month.
Investor fear has grown recently that Greece will leave the euro currency union, triggering a financial a panic in Europe and dragging down the rest of the world economy.
Some fear over Europe was allayed Thursday when Spain raised $2.6 billion from the bond market. The interest rate on its benchmark 10-year note fell to 6.02 percent from 6.26 percent late Wednesday in trading on the secondary market, a sign that bond investors have more confidence in Spain's finances.
Among stocks making big moves in the U.S.:
• Pharmacyclics Inc. rose $1.96, or 6 percent, to $36.73 after an analyst predicted that the company's experimental lymphoma drug could grow into a blockbuster product.
• Molina Healthcare, an insurance company, plunged $7.99, or 31 percent, to $17.77 after it withdrew its 2012 profit forecast, citing a possible revenue shortfall in Texas.
• Men's Wearhouse dropped $6.72, or 19 percent, to $28.85 after reporting disappointing financial results and issuing a weak forecast for its second quarter.