NEW YORK (AP) - Wall Street closed another difficult session lower but well above its worst losses yesterday after a late-day rebound in financial shares lifted many other stock sectors. Investors still kept their distance from technology shares after a lacklustre forecast from Cisco Systems Inc.

Stocks extended the previous day's steep losses after Federal Reserve chairman Ben Bernanke warned that a raft of economic troubles could dent business growth and after Cisco's comments touched off unease about business spending. But buyers moved back in late in the session, apparently thinking the market's sell-off had been overdone even with the host of concerns investors face, observers said.

Bernanke, appearing before Congress' Joint Economic Committee with the Fed's economic forecast, warned of threats to the economy but did not offer solid evidence the bank is prepared to further cut interest rates.

The slide seen during much of the session - at one point the Dow had fallen another 200 points - came a day after stocks tumbled amid concerns about continuing credit woes, a weakening dollar and rising oil prices.

Investors also had fresh reason for concern about toxicity within the credit markets. Morgan Stanley issued a detailed accounting of its exposure to sub-prime debt, pleasing investors by eliminating some of the uncertainty that has wracked Wall Street to varying degrees in recent months. But Morgan said late Wednesday its fourth-quarter profit could be reduced by $2.5 billion in write-downs related to troubles in the credit market, a reminder of the widespread damage from soured loans.

"The market gets oversold regardless of the fundamentals," said Brandon Thomas, chief investment officer of Portfolio Management Consultants, the investment arm of Envestnet Asset Management.

"What the market does is it steps back and says 'Are we becoming oversold here even on a short-term basis?' I think there's been a lot of bottom fishing," he said.

According to preliminary calculations, the Dow Jones industrial average fell 33.73, or 0.25 percent, to 13,266.29. The decline comes a day after the blue chips fell 360.92; Wednesday's decline was the third drop of more than 350 points in a month, offering the latest sign of how jittery many investors remain.

Broader stock indicators also came off their lows. The Standard & Poor's 500 index fell 0.85, or 0.06 percent, to 1,474.77, and the technology-heavy Nasdaq fell 52.76, or 1.92 percent, to 2,696.00.

Declining issues outnumbered advancers by more than eight to seven on the New York Stock Exchange, where volume came to a heavy 2.17 billion shares compared with 1.66 billion traded on Wednesday.

Government bonds rose as stocks retreated. The yield on the 10-year Treasury note, which moves opposite its price, fell to 4.27 percent from 4.30 percent late Wednesday.

The Chicago Board Options Exchange's volatility index, known as the VIX, and often referred to as the "fear index," which jumped nearly 24 percent on Wednesday, fell 3.9 percent but still remained near levels not seen since mid-August.

The dollar was lower against most other major currencies. Gold prices advanced for the fifth straight day as investors looked for alternatives to an anemic dollar. Gold rose $4 to a record close of $837.50 an ounce on the New York Mercantile Exchange.

Light, sweet crude fell 91 cents to $95.46 on the New York Mercantile Exchange.

Mr. Bernanke's words - even those that might have helped ease some of Wall Street's concerns - appeared to leave investors with little optimism for much of the session.

Mr. Bernanke acknowledged the market's recent jitters but said he believes the economy will rebound from recent problems by the second half of next year. But he added that rising prices for oil and other commodities had stoked concerns about inflation and repeated the Fed's assessment made last week that monetary policy seemed well-balanced to allow for growth while curtailing inflation.

Mr. Thomas contends the Fed will only be able to do so much, particularly because a rate cut could give way to higher inflation and could further undermine the dollar.

"It's a real difficult time because whichever way they push and pull the level it causes problems," he said.

While investors parsed Bernanke's comments for clues about the Fed's plans, they also looked to mixed corporate news.

Morgan Stanley led financial stocks higher, rising $2.49, or 4.9 percent, to $53.68 after the nation's No. 2 investment bank appeared to relieve investors who had grown fearful that its sub-prime losses could be worse. The bank said it could lose up to $6 billion if all subprime mortgage-related investments were to go bad.

Cisco fell $3.12, or 9.5 percent, to $29.63 after the world's largest maker of networking equipment issued forecasts that disappointed Wall Street and stirred concerns of a further slowdown in spending by businesses.

A narrower-than-expected third-quarter loss at Ford Motor Co. and word of a buyout offer in the mining sector were not able to sustain higher prices.

Stripping out items that analysts typically exclude, Ford's loss came to a penny a share. This was far less than the 46 cent-a-share loss analysts had been expecting on average, according to a Thomson Financial poll. Ford rose 24 cents, or 2.9 percent, to $8.48.

Mining company BHP Billiton plc. confirmed speculation it would go after rival Rio Tinto plc. While Rio Tinto rejected the offer, the notion that BHP would make a buyout offer given recent uncertainty in the world's markets seemed to please investors. BHP Billiton fell $3.50, or 4.4 percent, to $76.85, while Rio Tinto surged $82.70, or 23 percent, to $440.20.

The Russell 2000 index of smaller companies rose 4.94, or 0.64 percent, to 780.94.

Overseas, Japan's Nikkei stock average closed down 2.02 percent and Hong Kong's Hang Seng index fell 3.19 percent. Britain's FTSE 100 fell 0.05 percent, Germany's DAX index rose 0.25 percent, and France's CAC-40 fell 0.91 percent.