US stocks staged a dramatic late-day rebound today as bargain-hunting investors swooped in to rescue a market pummeled to new 1997 lows by nagging worries about sketchy accounting and an uncertain outlook for corporate profits.
Major market gauges plunged dramatically during the session, sending the blue-chip Dow Jones industrial average down more than 5 per cent at one point, and investors even shrugged off a proposed merger between drug companies Pfizer Inc. and Pharmacia Corp.
Stocks pared the bulk of their losses in the last hour of trading, as fears faded that investors bailing out of the market would force mutual funds to sell their holdings and spur a new round of selling.
"This is one of the most incredible turnarounds I've seen," said Michael O'Hare head of block trading for Lehman Brothers.
The Nasdaq composite index finished the day with a gain of 8.61 points, or 0.63 percent, at 1,382.11.
The Dow fell for a sixth straight session, but the index ended off just 45.34 points, or 0.52 percent, at 8,639.19, after losing some 440 points at the low of the day.
The broad Standard & Poor's 500 ended down 3.53 points, or 0.38 percent, at 917.86, after falling 4.8 percent at one point and digging out a new trough last seen in 1997.