Stocks tiptoe higher

NEW YORK (CNNMoney.com) -- Stocks recovered from the morning's technology-led weakness, but struggled to find momentum Tuesday afternoon amid mild comments from Federal Reserve Chairman Ben Bernanke and no new catalyst after last week's rally.

The Dow Jones industrial average (up 7.29 to 12,669.03, Charts) and the broader S&P 500 (up 1.31 to 1,448.30, Charts) index both added a few points with roughly 35 minutes left in the session.

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The Nasdaq (up 1.21 to 2,471.81, Charts) composite was little changed.

All three major gauges had slipped through the early afternoon, with the Nasdaq down the most, ahead of comments from several Fed officials. But the declines were modest and as such, eased up as the afternoon wore on.

Afternoon comments from Fed Chairman Ben Bernanke and Chicago Fed president Michael Moskow did not address current economic policy and therefore had little impact on the direction of stocks.

After last week's big rally, investors have been struggling a bit this week, particularly with few economic reports due and the majority of the earnings reports already out.

Fed Chairman Bernanke, speaking before the Omaha Chamber of Commerce, discussed the history and implications of economic and wage inequality. The speech did not address the current current state of the economy or interest rates and was something of a relief to investors.

The same was true for a speech from Chicago Fed president Michael Moskow, who discussed economic development in the Illinois region and did not address current policy.

San Francisco Fed president Janet Yellen is also expected to speak today.

Investors also took in comments from Treasury Secretary Henry Paulson, who told Congress that the economy is slowing to a steady growth rate, providing the government a window for reforming Medicare and Social Security.

Paulson's comments Tuesday were part of a broader discussion on President Bush's proposed $2.9 billion budget for the year, announced Monday.

Stocks on the move included chipmakers, which fell following a profit warning from National Semiconductor late Monday, dragging techs along for the ride.

Beyond that, there didn't seem to be any one particular catalyst for stocks, said Tom Schrader, managing director of U.S. listed trading at Legg Mason.

"It's kind of directionless right now," Schrader said, noting the economic calendar doesn't pick up until next week and a lot of the major earnings are already out.

"You had oil getting up closer to $60 a barrel earlier and that was making people a bit nervous, so that's something to keep an eye on," he added.

Crude oil for March delivery rose 14 cents to settle at $58.88 a barrel on the New York Mercantile Exchange.

In corporate news, National Semiconductor (down $0.56 to $22.76, Charts) warned late Monday that revenue in its fiscal third quarter will fall more substantially from the second quarter than previously thought, due to slower shipments. Shares dropped about 2 percent, recovering from bigger declines earlier in the session.

The broader chip sector cut its losses too, with the Philadelphia Semiconductor (down 2.24 to 464.88, Charts) index, or the SOX, down just 0.5 percent after falling more than 1 percent in the morning.

In merger news, mortgage insurance company MGIC Investment (up $6.96 to $69.89, Charts) said it is buying rival Radian Group (up $5.47 to $66.31, Charts) in a $4.9 billion stock swap.

Private-equity group Blackstone boosted its offer for Equity Office Properties (up $0.38 to $55.84, Charts) to $23 billion, bringing its bid to just below the counter offer made by Vornado Realty Trust (up $2.13 to $127.23, Charts).

Market breadth was positive. On the New York Stock Exchange, winners beat losers by five to three on volume of 1.22 billion shares. On the Nasdaq, advancers edged decliners 8 to 7 on volume of 1.8 billion shares.

COMEX gold for March delivery rose $2.60 to settle at $658.70 an ounce

Treasury prices rose, sending the yield on the benchmark 10-year note to 4.76 percent from 4.81 percent late Monday. Bond prices and yields move in opposite directions.

In currency trading, the dollar turned higher versus the yen after Paulson said there was nothing fundamentally wrong with the yen's weakness and that Japanese officials haven't been interfering to keep the yen near 20-year lows.

The dollar slid further versus the euro.

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