NEW YORK — Wall Street is showing it still has plenty of moxie.
Investors shook off an attack of nerves that wiped out a big early advance Wednesday and then barreled back into the market right before the close.
Trading was extremely erratic. The Dow Jones industrials rose as much as 203 points in response to upbeat economic data, then fell nearly 110 during the afternoon before closing up nearly 90.
Weak demand during an auction of government debt stirred up worries about how easily Washington will be able to raise money to fund its economic rescue program, market analysts said. The fear in the market is that the government might not be able to easily raise the hundreds of billions of dollars it needs.
The day proves that Wall Street remains fragile despite a two-week rally that saw the Dow regain more than 1,000 points.
“There was a mix of good and bad news and at the end of the day the good news won out,” said Alan Skrainka, chief market strategist at Edward Jones. “It’s a jumpy market.”
Doug Roberts, chief investment strategist at , said, “Right now there is a lot of crosscurrents coming. People want to be flat going in to the following day. They really don’t want to be holding a major position.”
Some analysts said the late surge — which lifted the Dow nearly 178 points, or 2.35 percent, in the last hour — was due in part to short covering. That’s a trend caused by investors who had borrowed and sold stock on a bet the market would fall and who have to cover their positions when they see the market starting to turn higher.
The day’s oscillations, which recall some of the volatile trading Wall Street saw during the worst of its fall and winter selling, aren’t surprising and in fact may be a sign of the market’s resilience. While no one knows if the market is indeed recovering, analysts expect pullbacks and uncertainty as investors try to figure out their next moves. Wednesday’s trading may well be setting a pattern for stocks going forward.
“I think we’re vulnerable to the changing views of the market over very short time periods,” said Jim King, chief investment officer at National Penn Investors Trust Co. in Reading, Pa.
The Dow closed up 89.84, or 1.17 percent, at 7,749.81, while the Standard & Poor’s 500 index rose 7.76, or 0.95 percent, to 813.88. The Nasdaq composite index rose 12.43, or 0.82 percent, to 1,528.95.
