Investors take a timeout

NEW YORK (CNNMoney.com) -- Stocks were mixed Thursday morning, as investors paused after a two-day rally, amid weaker earnings from Bear Stearns, a profit warning from FedEx and the start of the subprime mortgage lending hearing on Capitol Hill.

The Dow Jones industrial average (Charts), the broader S&P 500 (Charts) index and the tech-heavy Nasdaq composite (Charts) all hovered near unchanged, after slipping in the first 30 minutes of trade.

Stocks rose Tuesday and Wednesday after the Federal Reserve cut a key interest rate by a half-percentage point, reassuring investors worried that the mortgage and credit market malaise could send the economy into recession.

After such an advance, investors took a step back Thursday morning. However, early declines were minimal, with Wall Street still taking comfort in the Fed's decision to cut rates for the first time in 4 years.

Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson and Secretary of Housing and Urban Development Alphonso Jackson were all scheduled to testify.

According to prepared remarks, Bernanke will tell lawmakers that the Federal Reserve will continue to address the problems in the mortgage market and to take steps to protect consumers and the economy from the impact of subprime.

He is also expected to urge caution when it comes to the proposed temporary lifting of caps on Fannie Mae and Freddie Mac, a move some lawmakers believe would help by putting more liquidity into the mortgage market.

Secretary Paulson is expected to tell Congress that the Bush Administration would be willing to temporarily allow the lifting of caps, reversing course from recent policy.

In corporate news, Bear Stearns (Charts, Fortune 500) reported a big drop in third-quarter profit that missed estimates, due to the impact of the subprime mortgage fallout and financial market turmoil.

Goldman Sachs (Charts, Fortune 500) also said it was challenged by the tough environment, but nonetheless posted a rise in earnings and revenue.

FedEx (Charts, Fortune 500) warned that second-quarter and full-year earnings won't meet expectations, due to uncertainty about the economic outlook and housing market. The package delivery firm also reported higher fiscal first-quarter earnings thanks to strong international growth.

Treasury prices slipped, pushing the yield on the 10-year note to 4.59 percent from 4.53 percent late Wednesday. Bond prices and yields move in opposite directions.

In currency trading, the dollar slumped against the euro and was little changed versus the yen.

U.S. light crude oil for October delivery rose 22 cents to $82.15 a barrel on the New York Mercantile Exchange. Crude ended the previous session at an all-time high of $81.93 a barrel.

However, the record price remains below inflation-adjusted highs hit in the early 1980s, which would be equal to at least $95 a barrel today.

COMEX gold for December delivery rallied $11.70 to $741.20 an ounce.