Most stocks fell in New York yesterday, but blue-chip stocks edged higher as investors shrugged off worries about the near-collapse of a leading hedge fund.
The Dow Jones industrial average rose 26.78 points - or by 0.3% - to 8,028.77 despite an early 112-point slide that temporarily wiped out the rest of Wednesday's 257-point surge.
On Thursday, the Dow fell 152 points, mostly as a result of profit-taking on the prior day's big gains.
Broader stock indexes also recovered from an early sell-off fuelled by uncertainty over the near-collapse of Long-Term Capital Management, which manages investments for the wealthy.
Late on Wednesday, the Federal Reserve Bank of New York orchestrated a $3.5 billion bail-out of the hedge fund amid worries that the fund's failure would jeopardise the US financial system.
Helping to stem some of yesterday's selling was optimism that the Federal Reserve will cut interest rates at its policy-making committee meeting next week. Fed Chairman Alan Greenspan helped spark Wednesday's rally by signalling that the central bank will lower interest rates to combat the widening crisis overseas.
The Standard and Poor's 500 rose 2.03 to 1,044.75, and the technology-heavy Nasdaq composite index rose 23.25 to 1,743.59.
Declining issues outnumbered advancers by a 10-to-nine margin on the New York Stock Exchange, with 1,460 up, 1,618 down and 469 unchanged.
NYSE volume totalled 723.92 million shares, down from 799.69 million in the previous session.
