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NEW YORK (CNNMoney.com) -- The Nasdaq rose and the broader market was mixed Wednesday as investors welcomed Fed Chairman Ben Bernanke's comments that the central bank is likely to keep cutting rates, but remained wary about the economic outlook.

The Dow Jones industrial average (INDU) added a few points, while the broader Standard & Poor's 500 (SPX) index lost a few points. The Nasdaq composite (COMP) gained 0.4%.

Thursday brings the revised reading on fourth-quarter GDP as well as day two of Ben Bernanke's congressional testimony.

Stocks had a choppy morning, as investors weighed weak reports on housing and manufactured goods, near-record oil prices and a record-low dollar versus the euro.

But two mid-morning events helped stocks erase losses and turn higher, until a late-day lethargy knocked out most of those gains.

Freddie Mac (FRE, Fortune 500) and Fannie Mae (FNM) shares jumped on news that the mortgage lenders will see the restrictions on the size of their portfolios removed, as of March 1, freeing up billions of dollars for investing in the housing market.

Investors also welcomed Chairman Bernanke's testimony before the House Financial Services Committee, on the first day of his semi-annual Congressional testimony on monetary policy.

Bernanke said that the problems in housing, the labor market and the credit markets could pose a "downside risk" to the Fed's current economic outlook. He also said that inflationary pressures are higher than they were in recent months.

Nonetheless, he indicated that the Fed is likely to continue cutting interest rates in the near term.

The Fed, meeting March 18, is expected to cut the fed funds rate, a key short-term interest rate, by a half-percentage point. The central bank has been cutting interest rates steadily since September in an attempt to protect the economy from falling into a recession amid the housing and credit market crises.

"The testimony was more evidence that the Fed is more concerned with economic growth than inflation and that there is a bias toward more rate cutting," said Matt King, chief investment officer at Bell Investment Advisors.

King said that although inflation remains a problem, and Bernanke noted it, the chairman didn't seem to be overly concerned about it.

Economic news. Durable goods orders slumped by 5.3% in January, due to the slowing economy. It was the biggest plunge in five months and worse than the 4% drop economists were expecting. Orders rose 4.3% in December.

Another report showed January new home sales fell to a 588,000 unit annualized rate from a revised 605,000 unit annualized rate in the previous month. Economists thought it would fall to a 600,000 unit annual rate.

Stocks rose for the last three sessions as investors have welcomed some upbeat company news and shrugged off more signs of a slowing economy and rising inflation.

Corporate news. Separately, Fannie Mae reported a much steeper-than-expected quarterly loss, due to rising home-loan delinquencies, ahead of the announcement about the lifting of the portfolio caps.

The European Union fined Microsoft (MSFT, Fortune 500) a record $1.3 billion for charging rivals too much to make compatible software. The software leader said that the fines were about past issues and the company is now working to make its products more accessible. Shares ended little changed.

IBM (IBM, Fortune 500) said it has become more confident about its U.S. business, one day after boosting its 2008 outlook and announcing a $15 billion share buyback plan. Shares gained 1.8%.

Autodesk (ADSK) reported weaker fourth-quarter earnings and warned that first-quarter, second-quarter and fiscal 2009 earnings won't meet forecasts, due to a slowdown in sales. Shares of the design software maker tumbled 15.6% in active Nasdaq trade.

Airline stocks slumped on surging oil prices and on concerns that a Delta (DAL, Fortune 500)-Northwest (NWA, Fortune 500) merger seems to be hitting some roadblocks. The Amex Airline (XAL) index fell 3.5%.

Market breadth was negative. On the New York Stock Exchange, losers beat winners 8 to 7 on volume of 1.46 billion shares. On the Nasdaq, decliners topped advancers by a narrow margin as 2.23 billion shares changed hands.

Other markets. U.S. light crude oil for April delivery fell $1.24 to $99.64 a barrel on the New York Mercantile Exchange after a government report showed inventories rising for the seventh straight week. Earlier, oil had hit an electronic trading record of $102.08.

COMEX gold for April delivery rose $12.10 to settle at $961 an ounce after hitting a trading record of $967.70 during the session.

Treasury prices rose, lowering the yield on the benchmark 10-year note to 3.84% from 3.85% late Thursday. Bond prices and yields move in opposite directions.

In currency trading, the dollar touched an all-time low versus the euro and also declined against the yen.