Dow index drops briefly below 12,000

NEW YORK » Wall Street gyrated and then steadied itself Wednesday, closing with a respectable advance although the Dow Jones industrials fell as much as 136 points and briefly dropped below the 12,000 mark before recovering.

Stocks bounced back and forth a day after concerns about faltering subprime mortgage lenders sparked a broad selloff.

The anxiety over mortgage lenders, particularly the subprime lenders that make loans to people with poor credit, pushed the Dow down by more than 240 points Tuesday, its second-biggest drop in nearly four years. Such concerns jostled stocks for much of yesterday's session.

"I think the market got below 12,000 and buyers came in," said Todd Leone, managing director of equity trading at Cowen & Co.

The Dow rose 57.44, or 0.48 percent, to 12,133.40.

Broader stock indicators also rose yesterday. The Standard & Poor's 500 index advanced 9.22, or 0.67 percent, to 1,387.17, and the Nasdaq composite index rose 21.17, or 0.90 percent, to 2,371.74.

The Russell 2000 index of smaller companies rose 6.56, or 0.85 percent, to 775.68.

Light sweet crude settled up 23 cents at $58.16 per barrel on the New York Mercantile Exchange.

The yield on the benchmark 10-year Treasury note rose to 4.52 percent from 4.50 percent late Tuesday. Gold prices fell.

Wall Street's turbulence came as stocks in Europe closed sharply lower, apparently seeing little room for optimism U.S. markets would rebound. Britain's FTSE 100 fell 2.61 percent, Germany's DAX index lost 2.66 percent, and France's CAC-40 fell 2.52 percent.

Japan's Nikkei stock average closed down 2.92 percent, while Hong Kong's Hang Sang index fell 2.57 percent and the sometimes volatile Shanghai Composite Index fell 1.97 percent.

The dollar, which was mixed against other major currencies, rose against the yen. Some observers have fingered the ascendent yen with contributing to the volatility seen in recent weeks on Wall Street.

A rise in the yen against the dollar stirred concern of a reduction in the so-called yen carry trade, which occurs when investors use the yen to acquire higher-yielding assets elsewhere.

Following Tuesday's sobering declines in stocks, investors appeared to find little reassurance in a General Motors Corp. report that it turned a profit for the fourth quarter, its first since the first quarter of 2006. GM, which fell 26 cents to $30.25, benefited from a big gain from the sale of about half its stake in its General Motors Acceptance Corp. financing arm.

In other corporate news, Citigroup Inc. rose 33 cents to $49.08 after announcing plans to begin a tender offer for Nikko Cordial Corp. on Thursday after raising its offer for Japan's third-largest brokerage to quell shareholder opposition.

H&R Block Inc., the nation's largest tax preparer, said it would delay filing its annual report and that the reduced value of its mortgage business pushed its quarterly loss higher. The stock rose 9 cents to $20.14.