Dow Roars Back, Regains 10,000

NEW YORK (TheStreet) -- The Dow staged a furious reversal and topped 10,000 at Friday's close, overcoming an earlier triple-digit loss.

The Dow Jones Industrial Average added 10 points, or 0.1%, to close at 10,012 after giving up as much as 167 points earlier in the session. The S&P 500 advanced by 3 points, or 0.3%, to 1066, as the Nasdaq closed 16 points higher, or 0.7%, at 2141 after spending much of the afternoon in negative territory.

Despite concerns that stocks would finish the week with steep declines, the late afternoon rally limited losses to below 1% on all three major averages. The Dow lost 0.6%, while the S&P 500 dipped 0.7% for the week. The tech-heavy Nasdaq slid 0.3% since last Friday's close.

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Fear gripped investors for much of the session, as concerns about soaring deficits throughout Europe weighed on stocks. A flight to safety boosted the greenback to an eight-month high against a basket of currencies at midday. The dollar index has since retreated, but remained 0.3% higher.

"Right now, it's a question of the market being traumatized by euro-land and it's all about the strengthening dollar," said Peter Cardillo, chief market economist at Avalon Partners. "It has nothing to do with economic numbers and corporate earnings, which have all been pretty good. It's really just a fear factor creeping into the market."

But stocks made a dramatic comeback in the last hour of trading, finishing in positive territory by the closing bell. Richard Sparks, senior equities analyst at Schaeffer's Investment Research, said the market looked oversold after losses mounted on top of the Dow's 268-point drop Thursday, prompting "people looking at it as a buying opportunity" ahead of the weekend.

A report from the Federal Reserve released late afternoon may have helped goose the rebound. Though data showed consumer credit fell for the eleventh straight month, credit declined by only $1.7 billion in December, despite forecasts calling for a $10 billion drop.