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Taming the turbulence

Credit worries send the Dow plummeting, but it recovers to end with a loss of just 15 points.

NEW YORK - Wall Street pulled off a dramatic late-session turnaround to close mixed Thursday after bargain hunters lured by weeks of massive declines came back to the stock market. The Dow Jones industrials, down more than 340 points in afternoon trading, ended the day with a loss of just 15 points.

The market appeared to be on an almost relentless downward spiral after problems at Countrywide Financial Corp. confirmed investors' fears that credit problems are spreading. Moreover, for much of the day, investors shrugged off the Federal Reserve's injection of $17-billion into the banking system.

The market clawed back with a bounce in blue-chip stocks, with a leadership role going to the downtrodden financial sector.

But Wall Street is still an uncertain place, having been pounded by weeks of losses including triple-digit slides in the Dow. All three of the market's big indexes reached levels Thursday where they were down 10 percent from their mid-July highs - the definition of a stock market correction.

After its wild ride Thursday, the Dow fell 15.69, or 0.12 percent, to 12,845.78. The S&P rose 4.57, or 0.32 percent, to 1,411.26, and the Nasdaq composite index dropped 7.76, or 0.32 percent, to 2,451.07. The Russell 2000 index of smaller companies rose 17.29, or 2.30 percent, to 768.83.

Investors have also been hoping that policymakers might lower interest rates to help bolster the economy. The likelihood of a rate cut before, or at, the next Fed meeting seemed less likely as the central bank instead chose to add liquidity to the market.

At its last meeting, the Fed left rates unchanged at 5.25 percent, where it has stood since last summer. However, policymakers said during their commentary that inflation continues to be a worry, and also recognized the debt and credit crunch for the first time.

Central banks around the world have been supplying billions of funds to banks in the past week to make cash available for lending and keep interest rates from rising amid signs that credit was drying up. The Fed uses a repo to buy securities from dealers, who then deposit the money into commercial banks.

Countrywide fell $2.34, or 11 percent, to $18.95 after the mortgage lender borrowed $11.5-billion from a group of 40 banks to fund loans, in a move that shows just how deep the lending crisis has become. The company has been slammed as the credit crunch has driven a number of its smaller peers to bankruptcy.

But, there appeared to be renewed sense that bigger financial institutions would be able to withstand troubles in the mortgage industry. Delinquencies and defaults among loans extended to risky borrowers have seeped into the fixed-income market, where mortgage-backed securities have suffered.

Overseas, markets reacted to the declines in the United States. Britain's FTSE 100 fell 3.05 percent, Germany's DAX index fell 1.86 percent, and France's CAC-40 fell 2.52 percent. In Asia, Japan's Nikkei stock average fell 1.99 percent. Hong Kong's Hang Seng Index fell 3.3 percent, while the often-volatile Shanghai Composite Exchange fell 2.1 percent.

Tampa Bay stocks

The Dow Jones Industrial Average is down 8 percent from its peak July 19, but most Tampa Bay stocks have fared worse.

Worst performers

GeoPharma: $2.50 -41.9%
Quality Distribution $7.93 -31.7%
Flanders Corp. $4.59 -29.3%
Walter Industries $22.80 -27.1%
Utek Corp. $13.00 -26%

Best performers
SRI/Surgical Express $5.50 +8.1%
Brown & Brown $26.00 +3.2%
Syniverse Holdings $13.16 -0.7%
Catalina Marketing $30.49 -4.1%
Raymond James $31.00 -4.8%

[Last modified August 16, 2007, 23:18:39]