Wall Street trudged through another seesaw session Wednesday after regulators allowed Fannie Mae and Freddie Mac to buy more mortgages and Federal Reserve Chairman Ben Bernanke said the central bank will remain vigilant about the weakened economy.

Investors pared the market’s gains after both developments had initially boosted the market’s confidence amid increasing signs of a slowing economy. Wall Street has in recent months grappled with concerns about rising prices, a weaker dollar and continued turmoil in the credit markets.

Bernanke indicated the Fed is more concerned about the sagging economy then the immediate risks of inflation. In testimony on Capitol Hill, he told lawmakers the Fed will “act in a timely manner as needed to support growth and to provide adequate insurance against downside risks.”

The remarks came as the dollar plunged to a record low against the 15-nation euro. That sent already inflated oil and gold prices further into record high territory, and raised the prospect of accelerating inflation.

Meanwhile, Fannie Mae and Freddie Mac _ the biggest sources of financing for U.S. home loans _ helped prop up the market after the government removed restrictions on the size of their portfolios. That offered a chance for an easing of the extremely tight mortgage market that has been battered by the subprime loan crisis.

“The government is trying to do their part,” said Todd Leone, managing director of equity trading at Cowen & Co. “Together, this helps put a little more faith in the economy.”

Major indexes initially moved higher, but investors took profits in midafternoon trading, following a pattern set in recent weeks. The Dow Jones industrial average _ which had been up three straight sessions _ fell 31.34, or 0.25 percent, to 12,653.58.

Broader indexes were also lower. The Standard & Poor’s 500 index fell 5.70, or 0.41 percent, to 1,375.59, and the Nasdaq composite index shed 6.90, or 0.30 percent, to 2,337.93.

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