Investors paused Monday after last week's run-up in U.S. stocks, reading caution into Federal Reserve chairman Ben Bernanke's tepid assessment of the U.S. economic recovery.

The Dow Jones Industrial Average edged up 2 points, or 0.02%, to 11384 in midday trading, after a strong three-day rally that saw the Dow climb 2.6% on the week.

Major banks were weak Monday after Nomura said one or more U.S. credit rating agencies could downgrade some large U.S. banks and brokers in early 2011, with Bank of America, Citigroup and Morgan Stanley seeming to be most at risk.

Bank of America led the Dow's declines, falling 1.4%. Citigroup edged down 0.5%, while Morgan Stanley traded flat. Keeping the Dow's losses in check, Cisco rose 2.4% after Oppenheimer raised its stock investment on the company to outperform from perform.

The Nasdaq Composite edged up 0.2% to 2592.

The Standard & Poor's 500 share index slipped 0.1% to 1223.

Bernanke warned in a Sunday interview on CBS News's 60 Minutes that the economic recovery may not be self sustaining.

Still, he said he doesn't think a double dip recession in the U.S. is likely.

The central banker also said the Fed could commit more money to boost the economy after last month announcing $600 billion of asset purchases.

European Markets

European stocks finished mostly higher Monday, helped by strength in the oil sector, as finance ministers gathered in Brussels to consider their next move in the sovereign debt crisis.

The Stoxx Europe 600 index closed up 0.2% at 271.38. The index gained 1.6% last week, snapping a three week losing streak, as investors temporarily shrugged off concern that the debt crisis could imminently claim another victim.

Among the main regional indices Monday, the U.K's FTSE 100 gained 0.4% to 5,770.28, Germany's DAX 30 was 0.1% higher at 6,954.38 and France's CAC 40 index ended the session virtually unchanged at 3,749.23.

Peripheral markets put in a less convincing performance, as contagion worries persisted.

Spain's IBEX 35 lost 1.3% and Italy's FTSE MIB declined 1%.

The oil sector was the top gainer in Europe as crude traded near $90 a barrel. In London, shares of BP PLC surged 3.4% and Cairn Energy PLC rallied 2.6%, while Total SA advanced 1% in Paris.

Financial shares led the decliners once again, with Societe Generale down 1.8% in Paris and Deutsche Bank AG losing 1.6% in Frankfurt.

Monday's volatile session could be a sign of things to come.

Asian Markets

Asian stocks ended mixed Monday as investors considered disappointing U.S. non farm payrolls data released Friday and Federal Reserve Chairman Ben Bernanke's comment that a further expansion of the central bank's asset purchase program was possible.

The Nikkei Stock Average slipped 0.1% in Tokyo, while South Korea's Kospi dropped 0.2%.

China's Shanghai Composite gained 0.5% and Hong Kong's Hang Seng Index declined 0.4%.

In Tokyo, Honda Motor shed 0.6%, showing a limited reaction to local media reports that said the automaker plans to pull out of a motorcycle joint venture in India with Hero Group and build a new plant in the country.

Hero Honda's shares fell 3.2% in India.

The broader market was mixed as exporters declined on a firmer yen, while steel and other commodity linked stocks rose.

Among exporters, Canon fell 1%, while Panasonic Corp. dropped 1.2%.

In Seoul, some auto parts makers rose after the U.S. and South Korea finalized a free trade agreement over the weekend, paving the way for the removal of import tariffs for South Korean made car parts once the pact takes effect.

Hyundai Mobis rose 1.5%, Sejong Industrial gained 3.1% and Hwashin climbed 9.5%.

Shares in China ended higher on gains in oil producers after crude oil futures rose to a two year high.

Among oil plays, PetroChina's Shanghai shares jumped 4.7%, while China Petroleum & Chemical added 2.0%.

Base Metals

Base metals closed mixed on the London Metal Exchange Monday, with an improving demand outlook helping to offset the stronger U.S. dollar.

The metals managed to hold up in tight ranges amid quiet trade, and took support from sustained inventory drawdowns and comments from Federal Reserve Chairman Ben Bernanke, who said the U.S. economy isn't likely to fall back into recession.

The markets largely shrugged off gains in the U.S. dollar, which usually damp demand for the dollar denominated commodities by making them more expensive for other currency holders.

Copper closed 0.5% higher on Friday's PM kerb, at $8,769.50 a metric ton.

Zinc closed unchanged at $2,219/ton.

Tin, which has been gaining in line with copper on underlying supply fears, pulled back during the session to close at $25,450/ton, 0.4% lower on the day.

Crude futures settled 19 cents higher at $89.38 a barrel Monday, having wavered between moderate gains and losses Monday as the dollar firmed.

Gold futures settled at a record higher aided by the twin preocupations of currency debasement and ongoing worries about Europe's sovereign debt.

Gold for February delivery gained $9.90, or 0.7%, to finish at $1,416.10 an ounce on the New York Mercantile Exchange.

Silver surged 1.6% but stopped short of $30 an ounce, with the March contract settling at $29.74 an ounce