Stocks bounce back after big selloff By TIM PARADIS, AP Business Writer NEW YORK - Wall Street rebounded fitfully Wednesday from the previous session's 416-point plunge in the Dow industrials as investors took comfort from comments by Federal Reserve Chairman Ben Bernanke but still showed signs of unease about the economy. In late afternoon trading, the Dow Jones industrials were up 55.76, or 0.46 percent, at 12,272.00. Broader stock indicators were also higher. The Standard & Poor's 500 index was up 7.82, or 0.56 percent, at 1,406.86, and the Nasdaq composite index was up 9.57, or 0.40 percent, at 2,417.43. Bernanke's remarks to Congress that he still expects moderate economic growth gave some investors confidence to look for bargains. A recovery in some overseas markets following a worldwide selloff Tuesday also lent some support to U.S stocks, but the advance lacked some conviction — the major indexes fluctuated through the morning and into the afternoon, with the Dow rising as much as 137 points before pulling back and then advancing again. The Fed chairman allayed some of the fears about a slowdown in the U.S. and Chinese economies that fed Tuesday's drop; remarks earlier in the week from former Fed Chairman Alan Greenspan warning that a U.S. recession could take hold later this year contributed to Tuesday's declines. Investors were parsing a series of economic reports out Wednesday, hoping to glean a direction for stocks. The market took some solace from a Commerce Department report that the U.S. economy grew at an annual rate of 2.2 percent in the fourth quarter. The gross domestic product reading was slightly below expectations, but didn't come in as low as some investors feared. The reading was more than a percentage point below the initial estimate of 3.5 percent made a month ago. Bernanke's comments and the GDP report helped depressed stock prices look a little more attractive. "It's typical that you get a bounceback the next day," said Joseph V. Battipaglia, chief investment officer at Ryan Beck & Co. "Now we're essentially flat on the year. Can we go up from here or down? That sorting-out process will continue now." A recovery in China's Shanghai Composite Index, which had fallen nearly 9 percent Tuesday, also helped boost U.S. stocks, although other Asian markets and European exchanges saw declines of more than 1 percent. Bonds fell as stocks tried to recoup some losses. The yield on the benchmark 10-year Treasury note rose to 4.56 percent from its low for the year of 4.47 percent late Tuesday. The dollar was mixed against other major currencies, while gold prices fell. Light, sweet crude rose 33 cents to $61.79 on the New York Mercantile Exchange as investors brushed off concerns about demand. In other economic news, the National Association of Purchasing Management- Chicago index of business conditions in the Midwest showed a weaker-than-expected reading. The February figure fell to 47.9 from 48.8 in January. The report is often viewed as a bellwether for the Institute for Supply Management's index of manufacturing activity for February, which is due Thursday. Also, a Commerce Department report found new-home sales fell by 16.6 percent in January from the previous month, the largest drop in 13 years. "I thought on Monday and I think even more today that the stock market offers good value and that it will move higher for the year," said Ed Keon, chief investment strategist at Prudential Equity Group. Valuations were lowered by Tuesday's drop, which erased $632 billion in shareholder equity, according to Standard & Poor's. In corporate news, Merck & Co. regained some ground after the drugmaker issued a first-quarter profit forecast that surpassed estimates of Wall Street analysts and raised its profit target for the year. The company rose $1.05, or 2.4 percent, to $44.23. Fremont General Corp. fell $2.06, or 17.6 percent, to $9.60 after the mortgage lender warned it would delay the release of its fourth-quarter report, which had been set for Wednesday. The company also plans to delay filing its annual report. Most U.S.-listed Chinese companies recovered at least some of their huge losses from Tuesday. Internet company Baidu.com Inc. rose 85 cents to $105.61, while Shanda Interactive Entertainment Ltd., which develops online games, rose 95 cents, or 4.2 percent, to $23.57. China Mobile Ltd. advanced $2.21, or 5 percent, to $46.37. Sprint Nextel Corp. rose $1.05, or 5.7 percent, to $19.50 after the nation's third largest wireless carrier said fourth-quarter profit rose 33 percent on stronger revenue. While many sectors saw buyers sniffing for deals, homebuilders saw additional selling, due in large part to the Commerce Department report that new-home sales plunged in January by the largest amount in 13 years. Toll Brothers Inc. fell 73 cents, or 2.4 percent, to $29.86; D.R. Horton Inc. dropped 46 cents to $25.25; Centex Corp. fell 89 cents $49.34; KB Home fell 60 cents to $49.49; and Pulte Homes Inc. fell 48 cents to $29.45. Advancing issues outpaced decliners by about 2 to 1 on the New York Stock Exchange, where volume was a heavy 1.71 billion shares. The Russell 2000 index of smaller companies was up 2.08, or 0.26 percent, at 794.74. Overseas, Japan's Nikkei stock average fell 2.85 percent, while Hong Kong's Heng Seng index ended down 2.46 percent. The benchmark Shanghai Composite Index rose 3.94 percent. Britain's FTSE 100 closed down 1.82 percent, Germany's DAX index finished down 1.53 percent, and France's CAC-40 was down 1.29 percent.