For the third straight day, major stock proxies fell sharply after inflation warnings from a Fed official. But in contrast to the prior two days, some last-minute bottom-fishing helped the indices recover most of the lost ground by the close. But a selling bias and negative sentiment clearly dominated Thursday's session.

The Dow Jones Industrial Average finished down 30.26 points, or 0.3%, at 10,287.10, after earlier sinking to as low as 10,218.09. Still, the Dow has lost 350 points, or 2.7%, so far this week. Notable laggards among Dow components included Caterpillar ( CAT), Altria ( MO) and Hewlett-Packard ( HPQ).

Several stocks helped cushion the losses for the blue-chip average on Thursday, including Wal-Mart ( WMT). The retail giant said same-store sales rose 3.8% in September and expects an increase of 2% to 4% for October. General Electric ( GE) also gained after raising its earnings guidance.

The S&P 500 fell 4.90 points, or 0.41%, to 1191.49, off an earlier low of 1,182.24. The S&P has lost 37 points, or 3% in the four sessions through Thursday's close.

The broad average was again weighed down by steep losses in energy shares, as the price of crude oil fell below $62 per barrel. The Amex Oil Index fell 2.15%, led lower by the likes of Amerada Hess ( AHC), Occidental Petroleum ( OXY), Chevron ( CVX) and Valero ( VLO).

The Nasdaq Composite remained relatively weak throughout the day, closing down 18.94 points, or 0.9%, to 2084.08 vs. its intraday low of 2069.04. So far this week, the Nasdaq has lost 67 points, or 3.1%. On Thursday, the index was hampered by weakness in big-caps such as Intel ( INTC), Apple ( AAPL) and Amgen ( AMGN).

It was once again Dallas Fed President Richard Fisher who led an already nervous market to further downside Thursday. Fisher -- made famous for using baseball analogies to wrongly signal the Fed would soon end hiking interest rates back in June -- has returned to the public sphere after more than three-months of being kept under wraps.

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