S&P says end is near for bank losses

NEW YORK -- A fractious Wall Street on Thursday rebounded from an early plunge to finish moderately higher after Standard & Poor's predicted financial companies are nearing the end of the massive asset write-downs that have devastated the stock and credit markets.

The S&P projection gave investors some hope the seemingly unrelenting losses from the mortgage and credit crisis might indeed be bottoming out. Standard & Poor's Ratings Services said it estimates write downs of subprime, asset-backed securities could reach $285 billion globally, up from its previous projection of $265 billion, but added "the end of write-downs is now in sight for large financial institutions."

"The S&P comment was a positive for the market because investors were relieved to think that the subprime problem may be behind us," said Al Goldman, chief market strategist at A.G. Edwards.

Wall Street clearly remains anxious, however. On Tuesday, the stock market launched its largest rally in more than five years after the Federal Reserve said it would auction $200 billion in Treasuries to help alleviate investment banks' financial bind. But since then, stocks have been volatile.

Kim Caughey, equity research analyst at Fort Pitt Capital Group, said while she is a market bull, it's possible investors extrapolated a bit too much good news from the S&P report. "I would rather see fewer foreclosures and housing prices bottoming out to decide that the credit crisis is drawing to a close," she said.

The S&P's note arrived on the heels of a spate of troubling news Thursday. A Carlyle Group fund warned late Wednesday it expects creditors will seize all the fund's remaining assets after unsuccessful negotiations to prevent its liquidation. Meanwhile, the government reported Thursday an unexpected dip in retail sales, and a research firm said nearly 60 percent more U.S. homes faced foreclosure in February than in the same month last year.

The Dow Jones industrial average finished up 35.50, or 0.29 percent, at 12,145.74, after being down more than 220 points early in the session and then popping up more than 100.

Broader market indexes also recovered from steep early losses. The S&P 500 index rose 6.71, or 0.51 percent, to 1,315.48, while the Nasdaq composite index rose 19.74, or 0.88 percent, at 2,263.61.