NEW YORK - Investors put together a cautious advance today as Federal Reserve Chairman Ben Bernanke told Congress an economic recovery depends on the government's ability to stabilize weak financial markets. The major market indexes were up moderately.

Bernanke's comments came as the central bank announced it would begin lending up to $200 billion initially to spur consumer and small business borrowing for autos, education, credit cards and other expenses. The Fed first announced the plan late last year and investors have been eager for details on how it would work.

The effectiveness of a series of moves by the Fed, the Treasury Department and other agencies to calm markets "will be critical determinants of the timing and strength of the recovery," Bernanke told the Senate Budget Committee.

With investors focused on Bernanke, they had little reaction to a weaker-than-expected report from the National Association of Realtors that pending U.S. home sales sank to a record low in January. The trade group said its seasonally adjusted index of pending sales for previously owned homes fell 7.7 percent to 80.4. Economists expected a reading of 85.1, according to Thomson Reuters.

Wall Street remained on edge a day after the Dow Jones industrial average plunged far below the 7,000 mark to end at 6,763 - the lowest close for the Dow since April 25, 1997. The Dow's 300-point drop Monday leaves the index more than 52 percent below its record high of 14,164.53 set in October 2007.

In midmorning trading today, the Dow rose 62.21, or 0.9 percent, to 6,825.50.

Broader stock indicators also rose. The Standard & Poor's 500 index rose 6.79, or 1 percent, to 707.61, and the Nasdaq composite index rose 12.76, or 1 percent, to 1,335.61.

The Russell 2000 index of smaller companies rose 0.62, or 0.2 percent, to 368.42.

Monday's drop was understandable because AIG is not only a "confusing, complicated situation, but it seems like a black hole at the same time," Ablin said. AIG posted a nearly $62 billion fourth-quarter loss even after getting a $150 billion loan from the government.

The dollar was mostly lower against other major currencies, while gold prices fell.

Light, sweet crude rose 41 cents to $40.56 a barrel on the New York Mercantile Exchange.

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