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 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. The index is an important measure of a part of the economy that has given investors headaches in recent months.
The ISM data helped the market regain lost ground, but anxiety still plagued the Street, with the indexes bouncing around choppily as many investors bailed out of equities and fled to havens such as Treasurys.
European and Asian stock markets fell for the third straight session Thursday on continued unease about the global economy.
Former Federal Reserve Chairman Alan Greenspan told a Tokyo seminar Thursday that he does not think economic slowdown in the U.S. is “probable,” toning down his earlier warning over a recession later this year.
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 hadn’t traded at these levels since early 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.
The technology-dominated Nasdaq composite index finished down 11.94, or 0.49 percent, at 2,404.21, following an earlier drop of 56 points.
Stocks plunged Tuesday amid escalating worries that the U.S. and Chinese economies are slowing, exacerbated by a huge decline in Chinese stocks and comments from Greenspan.
The market appears to be trading in a pattern similar to past downturns: dropping sharply one day, regaining some ground the next and then resuming its slide, waffling due to investors’ inability to recoup their lost conviction in stocks.
