NEW YORK — A big final-hour comeback pulled the Dow Jones industrial average nearly back to where it started Wednesday.
The Dow was down as much as 191 points earlier as the threat of a financial crisis spreading from Europe shook markets. The euro dropped to a nearly two-year low against the dollar, and oil prices sank to their lowest this year.
A late surge of buying erased nearly all the Dow’s deficit, leaving it down just 6.66 points at 12,496.15. Other indexes ended the day slightly higher.
In the last hour of trading, news crossed that the leaders of France and Italy favored using regionwide bonds to support Europe’s economy. That gave traders hope that a summit of European leaders might produce concrete steps to tackle the economic morass there. The Organization for Economic Cooperation and Development warned Tuesday that the 17 countries that use the euro risk falling into a “severe recession.”
Plenty of good ideas to buttress Europe’s financial system have been floated in recent weeks, said Paul Zemsky, global head of asset allocation at ING Investment Management. Eurobonds could be sold by countries in the currency union to raise money for bailouts and banks.
Some have proposed insuring bank deposits across countries that use the euro, a program modeled on the U.S. Federal Deposit Insurance Corp.
“There are all these great ideas,” Zemsky said. “But there’s nothing yet. There’s a lot of talk and no follow-through.”
The Standard & Poor’s 500 rose 2.23 points to 1,318.86. The Nasdaq rose 11.04 points to 2,850.12.
15%
Drop in crude-oil prices in May after Wednesday’s loss of $1.95 to $89.90 in New York trading. It’s the first fall below $90 since Nov. 1.
