By Vivian Chu
NEW YORK, Aug 20 (Reuters) - U.S. stocks pared losses in late morning on Wednesday, driven higher on rumors that U.S. forces had captured al Qaeda leader Osama bin Laden.
However, a U.S. official who asked not to be identified told Reuters it was "absolutely not true" that bin Laden had been captured.
The Dow Jones industrial average .DJI was off 10.48 points, or 0.12 percent, at 9,417.44, cutting its losses from early morning. The broader Standard & Poor's 500 Index .SPX rose 0.39 point, or 0.04 percent, at 1002.72. The technology-laced Nasdaq Composite Index .IXIC rose 1.65 points or 0.09 percent, to 1,762.70.
"I think the market was improving on a rumor that we caught bin Laden again, which makes it like an even 25 times that we have caught him so far," said Craig Cummings, a partner at Cantor Fitzgerald, noting the rumor has spread through market several times this year.
Trading on the New York Stock Exchange was light, which may have exaggerated the effects of the rumor on the market, traders said.