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Stocks recover from steep sell-off; Dow, S&P decline as Nasdaq rises

What began with a steep drop in the stock market ended Thursday with a modest decline for two key indexes. The Dow Jones industrial average lost just 60 points after being down nearly 240.

A jump in the number of people applying for jobless benefits and plummeting oil prices drove stocks lower at the market opening. By 11 a.m., the Dow was down 234 points. Then came late-afternoon reports that Greece may have reached a deal for a new austerity plan. The Dow made up nearly 100 points between 2:45 and 3 p.m. alone.

The Dow finished with a loss of 59.67 points, or 0.5 percent, to 12,050. The Standard & Poor's 500 index, down as many as 24 points, closed down just 3.64, or 0.3 percent, to 1,283.50.

But the two indexes most tied to economic growth fared better than the broader market. The tech-focused Nasdaq composite index was up 17.56, or 0.7 percent, to 2,686.75, while the Russell 2000 index of small companies gained 0.4 percent. For the week, both are up 2.7 percent.

Since late April, reports on manufacturing, retail sales, home sales and other economic indicators have come in weaker than economists anticipated. Europe's debt problems and a slowing growth rate in China have also raised concerns about the global economy. Wednesday, Federal Reserve Chairman Ben Bernanke said problems plaguing the economy may last longer than previously thought.

As a result, the stock market has fallen six of the last seven weeks. The S&P 500 is down 5.9 percent from its high for the year of 1363.61 in April.

"This is no longer looking like a small soft patch. It's beginning to look more like quicksand," said Lawrence Creatura, a stock portfolio manager at Federated Investors.

Energy companies such as Exxon Mobil and Chevron Corp. led the market downward after oil prices tumbled nearly 5 percent. Oil dropped after the International Energy Agency said 60 million barrels of oil would be released from reserves to make up for the loss of Libyan exports. Oil prices had spiked following unrest in Middle East and North Africa, raising concerns that higher fuel costs would slow the world economy.

Such companies as Netflix, Priceline.com and others in the consumer discretionary industry were mostly up. Overall, the group rose 0.4 percent. Investors are betting that a drop in oil costs could lead consumers to spend more money on things like movies, restaurants and clothing. Netflix was up 2.9 percent.

Companies that benefit from lower fuel costs also rose. Airline stocks such as United Continental Holdings Inc. and AMR Corp, the parent company of American Airlines, climbed by more than 4 percent.

Three stocks fell for every two that rose on the New York Stock Exchange. Volume was slightly above average at 4.4 billion.

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