Stocks Erase Worst of Losses

Updated from 4:18 p.m. EDT

The Dow Jones Industrial Average used a rebound in the financial sector to come almost all the way back from a 343-point loss Thursday before ultimately closing just slightly negative.

After overcoming a brutal drop that had stocks at their worst around midday, the Dow finished down only 15.69 points, or 0.12%, at 12,845.78.

The S&P 500 did recover fully, and rose 4.56 points, or 0.32%, to 1411.26. The Nasdaq Composite shed 7.76 points, or 0.32%, to 2451.07, though it was well above its lowest level.

Bears were in charge early as fears about the credit market continued to encircle the globe, and the Dow even had a loss of more than 200 points past 3 p.m. EDT, but a turnaround in big financial stocks gave the indices a chance to bounce back.

"Over the near term, equity markets are likely to remain volatile," said Michael Sheldon, chief market strategist with Spencer Clarke LLC. "However, hopefully we have seen the lows for at least a short while."

Phillip Roth, chief technical market analyst with Miller Tabak, isn't sure the trouble that has meant chaotic trading of late is necessarily over.

"There was emotional selling today that brought us to our lows of the day," he said. "The S&P 500 came very close to its March lows, which have acted as a support level. At best, though, we're setting up for an interim rally. The majority of stocks are below their 200-day moving averages, so at this juncture the overall trend is still to the downside."