WASHINGTON (AP) -- Federal Reserve Chairman Ben Bernanke told Congress Tuesday the fragile economy is facing "numerous difficulties" despite the Fed's aggressive interest rate reductions and other fortifying steps.

At the same time, Bernanke, testifying before the Senate Banking Committee, sounded another warning that rising prices for energy and food are elevating inflation risks. This problem looms even as officials try to cope with persistent strains in financial markets, rising joblessness and housing problems.

The situation, he said, poses "significant challenges" for Fed policymakers as they try to chart the best course for keeping the economy growing, while making sure inflation doesn't dangerously flare up. All the economy's problems -- including slumping home values, which threaten to make people feel less wealthy and less inclined to spend in the months ahead -- represent "significant downside risks" to economic growth.

Over the rest of this year, the economy will grow "appreciably below its trend rate" mostly because of continued weakness in housing markets, high energy prices and tight credit conditions, Bernanke said.

President Bush tried to strike an encouraging note: "The bottom line is this: We're going through a tough time." but "I believe we will come through this challenge stronger than ever before."

On Wall Street, the Dow Jones industrial average 92.65 to 10,962.54. It was the blue chips' lowest close

SAN FRANCISCO (AP) -- Intel Corp.'s second-quarter profit jumped 25 percent as blossoming sales of laptop chips helped the company cruise past Wall Street's estimates Tuesday.

Investors viewed the chip maker's favorable results as a sign that global PC demand is healthy despite a sputtering U.S. economy that has depressed some domestic spending. Intel CEO Paul Otellini said demand for Intel's chips remains strong "in all segments and all parts of the globe." Three-quarters of Intel's business is outside the U.S.

Intel shares rose 23 cents, or 1.1 percent, to $20.94 in after-hours trading. They had risen 24 cents, or 1.2 percent, to $20.71 in the regular session before the Santa Clara-based company reported its results.

Intel said its net income was $1.6 billion, or 28 cents per share, in the three-month period ending June 28.

That was 3 cents per share higher than what analysts surveyed by Thomson Financial were expecting. It was a 25 percent jump from the $1.28 billion, or 22 cents per share, that Intel earned a year ago.

Intel is profiting from surging global demand for laptops and the processors that power them, though lower prices for some of the fastest-growing models drove down Intel's closely watched average selling price in the latest quarter.

However, Intel can absorb the trend easier than smaller rival Advanced Micro Devices Inc. because Intel has made a faster switch to a new manufacturing process that lowers the cost of making each chip.