The Dow Jones Industrial Average recovered from a drop of 1.6 percent to gain 21 points, led by JPMorgan Chase & Co., after the Fed backed the third-biggest U.S. bank's purchase of Bear Stearns for $2 a share. Bear Stearns, Lehman Brothers Holdings Inc. and Goldman Sachs Group Inc. led financial shares to an almost five-year low on concern Wall Street's biggest firms may be overvalued as the Fed fails to prevent credit- market losses.
The Standard & Poor's 500 Index lost 11.52, or 0.9 percent, to 1,276.62 after falling as much as 2.4 percent. The Dow average gained 21.16, or 0.2 percent, to 11,972.25. The Nasdaq Composite Index decreased 35.48, or 1.6 percent, to 2,177.01. Three stocks fell for every one that rose on the New York Stock Exchange. Europe's benchmark index slid to a two-year low and Asian shares slumped for a third day.
Eight of 10 industry groups in the S&P 500 dropped today as the benchmark for U.S. equities extended its decline from an Oct. 9 record to more than 18 percent. Energy shares lost 2.5 percent as a group today after oil fell more than $4 a barrel on concern the economy has slipped into a recession.