Wall Street Finds Support

The averages fight back after a midday selloff to close higher.
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Updated from 4:11 p.m. EDT

Stocks endured a push-and-pull fight between the bears and the bargain-hunters Wednesday, but when the closing bell rang, the major averages had finished to the upside.

The

Dow Jones Industrial Average

rose 57.44 points, or 0.48%, to 12,133.40. Earlier, the index fell by as many as 135 points, putting it below 12,000 for the first time since Nov. 6. Twenty of the index's 30 components were higher, led by a 2.5% gain in

Microsoft

(MSFT) - Get Report

.

The

Nasdaq Composite

also fell before returning to positive territory. The tech-laden index closed ahead by 21.17 points, or 0.9%, at 2371.74, buoyed by a 3.7% gain in

Qualcomm

(QCOM) - Get Report

.

As for the

S&P 500

, it was better by 9.22 points, or 0.67%, to 1387.17. Like the other two indices, it alternated between positive and negative throughout the session.

"It's good to see the market turned off the bottom, which could be an important technical event," said Barry Hyman, equity market strategist with EKN Financial. "At the same time, I don't think we've seen enough power into the close for anyone to say that the end of the decline is over.

"The background story hasn't changed and liquidity problems still persist," he continued. "One should not expect to expect this crisis to begin and end within a few days."

Roughly 3.81 billion shares changed hands on the

New York Stock Exchange

. Advancers beat decliners by an 8-to-7 margin. Volume on the Nasdaq reached 2.29 billion shares, with winners outpacing losers 10 to 7.

Market subsector winners included the Philadelphia Housing Sector Index, which added 2%. The Amex Oil Index rose 1.2%, and the Philadelphia/KBW Bank Index tacked on 0.6%.

Among losers, the Amex Airline Index slid 0.7% and the S&P Retail Index dipped 0.4%.

The Dow is now down 2.6% for the year. The S&P 500 has fallen 2.2%, and the Nasdaq has given back 1.8%.

On Tuesday, stocks slumped amid concerns about the health of the housing and mortgage sectors, in particular the subprime lending area. A number of financials, the biggest group in the S&P, were sharply lower.

The Dow tumbled 242.66 points, or 1.97%, to 12,075.96, as all but one of its 30 components fell. The S&P lost 28.65 points, or 2.04%, to 1377.95, and the Nasdaq plunged 51.72 points, or 2.15%, to 2350.57.

"The subprime sector has cast a pall over the market," said Paul Nolte, director of investments with Hinsdale Associates. "There are a lot of companies involved in the subprime sector, and no one is sure how bad of a problem

it is or how much it will hurt us."

Even so, some individual names were gaining strength.

Accredited Home Lenders

(LEND) - Get Report

, which tanked Tuesday, soared 52.1% to $6.04, and

Novastar Financial

(NFI)

jumped 21.9% to finish at $4.18.

New Century

(NEWC)

, which now trades on the Pink Sheets after its removal from the

New York Stock Exchange

, fell 20.7% to 67 cents.

"For eight months, the bears have been saying that an expansion in defaults in the housing market would cause the economy to fall into a recession and take the market down with it," said Marc Pado, U.S. market strategist with Cantor Fitzgerald. "With jobs and wages still strong, we are a long way from using the 'R' word, but yesterday had all the right ingredients to draw this conclusion," he continued.

Meanwhile, overseas equities fell apart. The Tokyo Nikkei 225 sank 2.9%, and Hong Kong's Hang Seng plunged 2.6%. London's FTSE 100, Frankfurt's Xetra DAX and the Paris Cac 40 all declined by 1.8% or more.

As for the day's corporate news on the domestic front,

General Motors

(GM) - Get Report

posted a fourth-quarter profit after previously delaying its financial results.

However, the world's biggest automaker said it still has "a lot more work to do." GM earned $950 million, or $1.68 a diluted share, in the fourth quarter, compared with a year-earlier loss of $6.6 billion, or $11.63 a share. Sales slipped to $51.2 billion from $51.7 billion, reflecting the exclusion of revenue from GMAC. GM gave back 26 cents, or 0.9%, at $30.25.

Lehman Brothers

(LEH)

earned $1.96 a share on revenue of $5.05 billion for the most recent quarter. Both the bottom and top lines were a bit better than expected. Lehman lost 28 cents, or 0.4%, at $71.72.

The biggest investment banks on Wall Street are posting their numbers this week, and already

Goldman Sachs

(GS) - Get Report

reported a quarter that blew past estimates.

Among ratings moves, Friedman Billings Ramsey raised

Countrywide

(CFC)

to outperform from market perform and maintained a $45 price target. Countrywide tacked on 90 cents, or 2.7%, to finish at $34.39.

Citigroup upgraded select names in the DRAM sector, including

Micron

(MU) - Get Report

and

Qimondo

(QI)

. Micron closed up 33 cents, or 2.9%, to $11.59. Qimondo shed 31 cents, or 2.1%, to $14.43.

HSBC upgraded

Southwest Airlines

(LUV) - Get Report

and

JetBlue

(JBLU) - Get Report

, and Susquehanna raised its rating on retailer

American Eagle

(AEO) - Get Report

.

American Eagle was higher by 3.1% and Southwest rose 0.7%. JetBlue, however, slid 1%.

Investors also had another busy day on the economic front. The Labor Department said its import price index rose 0.2% in February, slightly below expectations.

Imported petroleum prices rose 2% last month, and natural gas prices climbed 2.5%. Excluding petroleum, import prices eased 0.2%, the largest decline since July 2005.

Elsewhere, the Commerce Department reported that the fourth-quarter current account deficit came in at $195.8 billion, narrowing from a revised $229.4 billion in the third quarter.

Treasuries were easing. The 10-year note was down 9/32 in price, raising the yield to 4.52%, and the 30-year bond was off 20/32 and yielding 4.69%. The dollar was mixed against other major currencies.

Crude futures finished higher following the latest weekly inventory report from the Energy Department. The data showed a build of 1.1 million barrels in crude inventories. Gasoline stocks fell by 2.5 million barrels, and distillate inventories declined by 2.8 million barrels.

The near-month April contract rose 23 cents to close at $58.16 a barrel. Natural gas tacked on 18 cents to $7.08 per million British thermal units.

Metals prices lost ground. Gold was down $6.90 to $642.50 an ounce, and silver fell by 13 cents at $12.83 an ounce.