The U.S. stocks lost steam on Thursday while gold gained ground as nervousness returned to the market before Federal Reserve Chairman Ben Bernanke gives his highly-anticipated speech on the economy and policy on Friday.

All major indexes ended firmly in negative territory, breaking a three-day winning streak. The blue-chip Dow Jones industrial average lost 170.89 points, or 1.51 percent, to 11,149.82. The Standard & Poor's 500 fell 18.33 points, or 1.56 percent, to 1,159. 27. The Nasdaq Composite Index dropped 48.06 points, or 1.95 percent, to 2,419.63. Gold futures bounced back late Thursday after plummeting as much as 11 percent in two days as investors fled stocks and into the safe haven.

Gold for Dec. delivery added 5.90 dollars to close at 1,763.20 dollars an ounce at the Comex division of the New York Mercantile Exchange.

Cautiousness was apparently seen in the market on Thursday. With all eyes on Bernanke, analysts said that those who expected the central bank head to launch another round of asset purchases are likely to be disappointed. Meanwhile, investors also seemed to factor in the possibility that Bernanke may just reiterate Fed's readiness to boost the economy rather than announce QE3 in his Friday's speech.

Weak jobs data weighed on sentiment as well. According to the Labor Department, the number of people applying for unemployment benefits unexpectedly climbed by 5,000 to 417,000 in the week ended Aug. 20. However, the department also said that the jump in initial claims was mainly because of a labor dispute at Verizon Communications.

Among those stocks in focus, Bank of America ended the session nearly 10 percent higher after soaring more than 20 percent in earlier session as Warren Buffett's Berkshire Hathaway announced it will invest 5 billion dollars in the bank.

Apple ended moderately lower as investors recovered from the shock that Apple's iconic chief executive officer Steve Jobs announced his resignation.

In other markets, the U.S. dollar traded mixed against major currencies in late New York trading while oil prices edged up on concerns over the incoming Hurricane Irene.

Light, sweet crude for Oct. delivery added 14 cents, or 0.16 percent to settle at 85.30 dollars a barrel on the New York Mercantile Exchange.