Federal Reserve Chairman Alan Greenspan shook financial markets today, fretting over lofty stock prices and promising to "act promptly and forcefully" at the first hint of inflation dangers.

In a volatile session on Wall Street, the Dow Jones industrial average fell 33.56 to close at 10,969.22.

The index plunged as Greenspan began his remarks, and trading remained turbulent as Wall Street debated the impact of his testimony. [Story, Page E1.] At one point, the Dow dipped more than 100 points from Wednesday's close.

The Nasdaq composite index was dragged lower by losses in technology stocks, closing down 77.33 at 2684.44. The Standard & Poor's 500 index fell 18.32, to 1360.97.

Greenspan's testimony "left little doubt that he is nervous about inflation risks in the United States," said Michael Moran, chief economist at Daiwa Securities America Inc. in New York.

Bond prices plummeted, sending the yield on the 30-year Treasury bond climbing. The price of the benchmark bond fell $8.44 per $1,000 invested, and its yield rose to 5.96 percent, from 5.90 percent late Wednesday. That further pressured stocks, particularly the highly priced technology shares that could suffer most in higher-interest-rate environments.

Hewlett Packard, which fell 7-5/16, to 105 1/4, suffered the steepest decline among Dow component stocks.

Greenspan's testimony drew Wall Street's focus away from the continuing stream of corporate earnings. The robust earnings season continued, but investors held to their pattern of selling stocks once their strong earnings are on the table.

America Online fell 4-9/16, to 110 1/2, after reporting late Wednesday that its earnings nearly tripled in its fourth quarter.

Amazon.com plunged 18 1/4, to 107-3/16, after surprising Wall Street with the prospect of steeper losses in future quarters. The online retailer Wednesday reported a second-quarter loss that matched analysts' estimates, and said it will spend heavily to expand its business.

The technology companies are also suffering from a round of profit-taking after leading the market to its new record highs earlier this month.