Stocks retreated but managed a partial late-day recovery Wednesday as investors reacted uneasily to Federal Reserve Chairman Ben Bernanke’s comments on the economy and news that two Bear Stearns Cos. hedge funds were essentially worthless.

Even without any bad news, a downturn in stocks was expected after the rally that began last week. On Tuesday, the Dow nudged past the 14,000 mark for the first time. With no major catalyst behind the advance, the record run has perhaps been puzzling to market watchers trying to determine if it has room to build or has run its course.

Investors sold off shares as Bernanke, speaking before the House Financial Services panel as part of the central bank’s midyear forecast, said the economy should strengthen into 2008 and inflation risks remain the Fed’s “predominant” concern. He also said the housing sector might get worse before it gets better — and remains a risk to consumer spending and overall economic growth.

Analysts said the Fed chief’s testimony didn’t contain anything new, but that it still had a cautious overtone. Bernanke’s comments exacerbated investors’ concern over news that the Bear Stearns funds were left essentially worthless by bad bets on subprime loans, and lackluster quarterly earnings reports.

“Bernanke didn’t really say a whole lot of things that were new, but he added to a combination of seemingly negative events,” said Todd Salamone, director of trading at Schaffer’s Investment Research. “But, investors are already reeling from Bear Stearns’ hedge funds sparking more subprime fears, and new worries about earnings.”

Corporate earnings reports continued in earnest. JPMorgan Chase & Co. posted better-than-expected earnings, but the bank said it increased reserves set aside to cover mortgage losses. Also adding to investor concern, Intel Corp. reported lackluster profit margins for the second quarter, and Yahoo Inc. lowered its forecast.

The Dow fell 53.33, or 0.38 percent, to 13,918.22. The blue chip index was down by as much as 134 points during the session.

Broader indexes also fell. The Standard & Poor’s 500 index fell 3.20, or 0.21 percent, to 1,546.17, while the Nasdaq composite index dropped 12.80, or 0.47 percent, to 2,699.49.

Bonds rose as fixed-income investors interpreted Bernanke’s comments on housing as favorable; they’re looking for interest rates to at least remain stable. The yield on the benchmark 10-year Treasury note fell to 5.03 percent from 5.07 percent late Tuesday. The dollar was mixed against other major currencies, while gold prices rose.

A barrel of light sweet crude rose $1.03 to $75.05 on the New York Mercantile Exchange. Oil rose after the U.S. Department of Energy said gasoline stockpiles unexpectedly fell, despite a bigger-than-expected rise in refinery operations.

The market had more bad news from the housing industry when builder Pulte Homes Inc. reported late Tuesday it expects to post a hefty loss from continuing operations for the second quarter, due to large charges and a worsening consumer environment. Shares of the company fell 62 cents, or 2.7 percent, to $22.09.

Declining issues outpaced advancers by a 2 to 1 basis on the New York Stock Exchange, where volume came to 1.61 billion.

The Russell 2000 index of smaller companies was fell 3.98, or 0.47 percent, to 845.91.

Overseas, Japan’s Nikkei stock average closed down 1.11 percent. At the close, Britain’s FTSE 100 fell 1.34 percent, Germany’s DAX index fell 1.804 percent, and France’s CAC-40 fell 1.69 percent.