Stocks edged narrowly higher Wednesday after initial deep losses, snapping an eight-day streak of losses.
The trading day started with steep declines after reports showed the U.S. services sector had softened and factory orders fell last month, adding to economic worries that this was the beginning of a second drip recession. After an hour of trading, the Dow had tumbled 166 points.
However, buyers came back into the market after a Wall Street Journal report said that three former top Federal Reserve officials had suggested the central bank may consider a new round of stimulus measures to help boost the economy. By the mid-afternoon, stocks had reversed their declines and the Dow Jones Industrial Average rose one-quarter of one percent to end the day at slightly more than 11,896.
The S&P 500 was also up one-half of one percent to close at just above 1,260. The Nasdaq Composite Index advanced nearly one percent to 2,693.
European stock prices closed sharply lower. London’s Financial Times index fell 2.3 percent to end the day at 5,585. The CAC-40 index in Paris plunged 1.9 percent to finish at 3,455. The DAX index in Frankfurt fell 2.3 percent to close at nearly 6,641.
In Asia, Tokyo’s Nikkei index slid more than 2 percent to finish at 9,637. Hong Kong’s Hang Seng index lost 1.9 percent to finish the day’s trading at nearly 21,993.
Gold traded at $1,663.40 per ounce, up $21.50 from Tuesday.
The dollar fell against the yen and the euro.