Dow falls 209 points but mostly recovers
NEW YORK » A still skittish Wall Street closed modestly lower Thursday, having clawed its way back from an early-session plunge after upbeat manufacturing data allayed fears about a flagging U.S. economy.
The Dow Jones industrials ended 34 points lower after tumbling 209 points in early trading and then briefly reaching positive territory in the afternoon.
Investors, relieved that manufacturing is still expanding, bought some of the stocks pummeled in Tuesday's drop, which sliced 416 points off the Dow. The blue chip index is now down 398 points, or 3.2 percent, from its closing level Monday, having rebounded halfheartedly Wednesday on calming words about the economy from Fed Chairman Ben Bernanke.
The Institute for Supply Management's index of February manufacturing activity came in at 52.3, stronger than the 50.0 reading analysts expected. Manufacturing had contracted a month earlier, according to the index, suffering from the listless housing market and hard-up auto industry.
A reading at 50 and above indicates expansion, while anything below 50 signals contraction.
"The aftermath of Tuesday's major selloff will linger for the next couple of days. I don't think we're totally out of the woods yet," said Peter Cardillo, chief market econo-mist at New York-based brokerage house Avalon Partners Inc.
The Dow fell 34.29, or 0.28 percent, to 12,234.34, after dropping as low as 12,056.54 in the first hour of trading. It hasn't traded at these levels since December.
Broader stock indicators also ended down after fluctuating in the afternoon.
The Standard & Poor's 500 index fell 3.65, or 0.26 percent, to 1,403.17, after tumbling 26 points earlier in the day.
Declining issues outnumbered advancers by about 5 to 3 on the New York Stock Exchange, where consolidated volume came to 3.92 billion shares -- just shy of Wednesday's volume of 3.93 billion shares, but much lighter than the 4.56 billion shares traded Tuesday.
The Russell 2000 index of smaller companies fell 2.27, or 0.29 percent, to 791.03.
Bond prices rose on weak stocks Thursday, pushing the yield on the benchmark 10-year Treasury note to 4.55 percent from 4.57 percent late Wednesday.
Gold prices fell, while the dollar rose against most major currencies, with the exception of the Japanese yen.
Meanwhile, oil prices rose for the seventh day in a row to settle at $62.11 a barrel Thursday on the New York Mercantile Exchange, the highest level in more than two months, as declining product supplies overshadowed traders' concerns about volatile global stock markets.