New York: US stocks fell for a seventh straight session on Thursday, with the Dow sliding below 9,000 for the first time in more than five years, as investors worried recent moves by authorities worldwide to thaw frozen credit markets might not be enough to avert a global recession.
The Nasdaq fell below 1,700 for the first time since August 2003. The Dow Jones industrial average was down 241.57 points, or 2.61 percent, at 9,016.53.
The Standard & Poor's 500 Index was down 17.18 points, or 1.74 percent, at 967.76. The Nasdaq Composite Index was down 34.26 points, or 1.97 percent, at 1,706.07.
However, stocks rose in skittish trade after trading opened as investors snapped up beaten down shares after a six-day slide and a solid profit from IBM spurred hope that the credit crisis might not be stifling all demand.
Shares of International Business Machines Corp, a technology services giant, rose two per cent, making the stock a top boost to the Dow, while Apple Inc, another tech bellwether, led the Nasdaq with a four per cent gain.
But trading was skittish, with some market participants away for the Jewish Yom Kippur holiday.
The hunt for cut-price shares also fueled a recovery in the shares of natural resource companies, with aluminum producer Alcoa, rebounding nearly six per cent after the stock was hammered in the wake of a profit shortfall that the company posted on Tuesday.
"What we're seeing is just a bear market rally. An oversold rally," said Dave Rovelli, managing director US equity trading at Canaccord Adams in New York.
"You could see a significant rally over the next couple of days. The market is so oversold."
The Dow Jones industrial average added 48.91 points, or 0.53 per cent, to 9,307.01.
The Standard & Poor's 500 Index climbed 4.08 points, or 0.41 per cent, to 989.02.
The Nasdaq Composite Index shot up 17.03 points, or 0.98 per cent, to 1,757.36.
IBM shares rose to $92.45 on the New York Stock Exchange, while Apple climbed to $92.83 on Nasdaq.
Even so, lowered profit estimates by some major retailers, including TJX Cos Inc, fueled some caution about the outlook for consumer spending.
TJX shares fell 3.7 per cent to $26.61 after the off-price retailer cut its profit outlook.
The expiration of a US Securities and Exchange Commission's ban on short selling in more than 950 financial stocks cast a pall on individual financial stocks, including Morgan Stanley, whose shares slid 11 per cent to $14.88 on the NYSE.
Short sellers borrow shares and sell them in anticipation that the price will fall.
They then buy the shares back at the lower price, returning them to the broker, and profiting on the price decline.
On the economic front, a government report showed the number of US workers filing new claims for jobless benefits fell 20,000 last week, in line with forecasts as the impact of hurricanes Gustav and Ike eased.
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