NEW YORK (CNN/Money) - Stocks gripped the unchanged line Wednesday, as investors sorted through Fed Chairman Alan Greenspan's Senate commentary and opted to remain on the sidelines.

The Dow Jones industrial average (down 2.44 to 10,834.88, Charts) ended the session just a few points below the flat line, holding on to most of its gains accrued in the previous session, when it hit a new high for the year.

The broader Standard & Poor's 500 (up 0.22 to 1,210.34, Charts) index and the Nasdaq composite (down 1.78 to 2,087.43, Charts) both ended nearly unchanged. The major gauges had been modestly weaker throughout most of the session, before picking up the pace in late trade.

Treasury prices tumbled, sending bond yields higher, and oil prices spiked.

Greenspan spoke before the Senate Banking Committee Wednesday as part of his semi-annual testimony on the economy and monetary policy. (For more details, click here.)

The Fed chief speaks before the House Thursday.

"Stocks are pretty flat, which I think is positive considering the litany of potential inflation risks mentioned in his (Greenspan's) testimony," said Jeff Kleintop, chief investment strategist at PNC Advisors, referring to slowing productivity and the behavior of world bond markets, among other factors.

"That, coupled with some negative corporate news today and higher oil prices, and we could have been lower," he added.

Upbeat reads on the housing market helped balance any jitters about Greenspan's testimony. However, the morning's other economic news, on industrial production and capacity utilization, was more mixed.

In corporate news, Applied Materials and Coca-Cola both reported improved quarterly results, while Network Appliance disappointed investors with its quarterly forecast.

After a sluggish start to the year, the major gauges have recovered over the last few weeks, with the Dow closing at a new 2005 high on Tuesday.

"Today (Wednesday), a lot of people are on the sidelines, but I think generally investors are beginning to return to the market after they were vacant in the first three weeks of the year," Kleintop added. "Mutual Fund inflows have shown that."

After the close, Hewlett-Packard reported first-quarter sales and earnings that rose from a year earlier and topped expectations. The computer and printer maker, which ousted CEO Carly Fiorina last week, also forecast a second-quarter sales range that sets the midpoint above analysts' estimates.

HP (Research), a Dow component, rose around two percent in extended-hours trade.

Earnings are due Thursday morning from Wal-Mart Stores and Target.

Wal-Mart (Research) is expected to have earned 74 cents per share, according to analysts surveyed by First Call, up from 63 cents per share a year ago.

Target (Research) is expected to have earned 89 cents per share, two cents short of what it earned a year earlier.

Reports are due before the open Thursday on weekly jobless claims and leading economic indicators. The Philly Fed is due at around noon.

Among his prepared remarks for the Senate Banking Committee, Alan Greenspan said the U.S. economy seems to have started 2005 expanding at a reasonably good pace, but cautioned about the need for fiscal discipline.

Separately, he said the nation needs to act on Social Security before 2008 to prepare for the onslaught of retiring baby boomers. He also said he would support a private account system, although he was not specific about what kind of plan he would support.

He had almost nothing to say regarding monetary policy, said Stephen Stanley, chief economist at RBS Greenwich Capital, other than to reiterate what most Fed watchers already know.

"In terms of monetary policy right now, most people expect the Fed to tighten during the next two or three meetings, but it's foggy beyond that," Stanley said. "Greenspan didn't really say much to clarify, either in his comments or in the question period. He was appropriately non-committal, and so there's been little reaction from stocks."

Bonds tumbled, with the Treasury market showing a bigger response to Greenspan's comments, in particular, the Fed chair's surprise at the reluctance of long-term bond yields to rise amid tightening interest-rate policy.

Treasury prices fell, pushing the yield on the 10-year note up to 4.15 percent from 4.10 percent late Tuesday. Treasury prices and yields move in opposite directions.

In corporate news, Applied Materials (up $0.01 to $17.50, Research) reported fiscal first-quarter sales and earnings late Tuesday that grew from a year ago and topped estimates. The chip gear maker also forecast current-quarter earnings that are above estimates. Countering that, AMAT warned that new orders may weaken in the short-term amid an industry slowdown.

Shares of Coca-Cola (up $0.65 to $43.30, Research), a Dow component, added 1.5 percent after the company reported quarterly earnings of 46 cents per share, unchanged from a year ago and six cents more than expected.

Shares of AIG (down $1.25 to $70.60, Research) fell 1.75 percent, weighing on the Dow. The insurance behemoth continues to suffer amid the fallout from its involvement in a potential price fixing and bid rigging scandal in the insurance industry.

On Tuesday, two employees of the insurance behemoth pleaded guilty to criminal charges in the New York State probe of the scandal. On Monday, Eliot Spitzer and the U.S. Securities and Exchange Commission subpoenaed the firm on additional chargers, that its products helped companies smooth earnings.

Network Appliance (down $2.63 to $31.73, Research) tumbled 7.6 percent. Late Tuesday, the computer data storage maker reported fiscal third-quarter sales and earnings that grew from a year ago. However, the company's fourth-quarter revenue forecast was shy of estimates, sending shares lower.

Market breadth was narrowly positive. On the New York Stock Exchange, advancers edged decliners on volume of 1.48 billion shares. On the Nasdaq, winners just surpassed losers on volume of 1.88 billion shares.

Housing starts rose to a 2.16 million unit annual rate in January, up from December and well above expectations. Building permits, seen as a sign of builder confidence, rose to a 2.11 million unit annual rate in January, also above the previous month and expectations.

Less upbeat was the read on industrial production, which was flat in January versus expectations for a rise of 0.3 percent. Industrial production rose 0.7 percent in December. Capacity utilization stood at 79.0 percent in January, down from 79.1 percent in December and shy of expectations for a read of 79.3 percent.

Stocks had looked headed toward a much more negative session in the morning following reports of a blast in an Iranian city caused by an aircraft-fired missile. However, the blast was later reported to be the result of a fuel tank falling from a plane, rather than an attack.

U.S. light crude oil for March delivery rose $1.07 to settle at $48.33 a barrel on the New York Mercantile Exchange.

In currency trading, the dollar fell versus the euro and rose versus the yen.

COMEX gold fell 40 cents to settle at $426.90 an ounce.