Stocks clawed back into positive territory Wednesday after a late afternoon bargain-hunting bounce wiped out early losses caused by weak profit outlooks from blue-chip firms American Express and drug heavyweight Merck.

"Markets were choppy all day, but toward the end of the day, buying came in and turned it around," said Lance Zipper, managing director of equity trading at Brean Murray & Co. "You have the end of the year coming up, so you'll start seeing some window dressing."

The blue-chip Dow Jones industrial average ended up 6.44 points at 9,894.81, or up 0.07 percent. The broader Standard & Poor's 500 Index rose 0.31 of a point, or 0.03 percent, to 1,137.07. The technology-laden Nasdaq Composite Index gained 9.45 points, or 0.47 percent, to 2,011.38.

Consumer products giant Procter & Gamble Co. , helped underpin the blue-chip Dow, after it forecast its first quarterly sales rise in more than a year, surging $3.25 to $79.95.

Most utilities were pressured by fallout from the meltdown of energy trader Enron Corp. , but the sector's early stock slide was halted by various power companies saying they were in good financial shape. Shares of drugmakers, grocers and other safe-haven investments in a jittery market fell after key companies came out with forecasts of anemic growth.

"It seems that with the companies that traditionally have been in places you would want to be in a turbulent market, the bottom is falling out," said David Roberts, who co-manages the $192 million Northern Large-Cap Value fund.

Grim news Tuesday that Merck & Co. sees its earnings growth drying up because patents on key drugs expire hit Merck's stock for the second day and dragged down other pharmaceutical stocks. Merck fell $2.18 to $58.52, adding to steep losses on Tuesday.

Bristol-Myers Squibb Co. shed $3.30 to $50.45, remaining under pressure after 29 U.S. states charged the drug company with violating antitrust laws by keeping cheaper alternatives to its BuSpar anxiety medication off the market. Schering-Plough Corp. slumped $1.79 to $36.86. The American Stock Exchange pharmaceutical index lost 1.21 percent.

American Express warned quarterly earnings would land at the low end of estimates and it would cut up to 6,500 more jobs. American Express shed most of its early losses, but still finished the session 84 cents lower to $33.42.

American Express helped push other financial stocks lower. Lehman Brothers Holding Inc. dropped 85 cents to $66.86, while Merrill Lynch & Co. lost 12 cents to $52.82. The S&P financial index fell 0.76 percent.

Despite the U.S. Federal Reserve cutting interest rates Tuesday for the 11th time this year, investors remain skittish about further economic weakness and how that will affect corporate profits.

"The market is in a wait-and-see mode, and everybody's looking for a 2002 recovery," said Rich Nash, a market strategist at Key Asset Management. "The Amex and Merck news has investors maybe thinking that (the market) had gone too far too soon, and now they're taking some money off the table."

Safeway Inc., the No. 3 grocery chain, skidded $2.49 to $38.95. UBS Warburg lowered its rating on Safeway to "reduce" from "hold," citing the prospect of increased competition from Kroger Co. , the largest U.S. grocer.

JP Morgan raised its rating on Kroger to "buy" from "market perform," explaining its stock was cheap after tumbling in the wake of a profit warning on Tuesday. Kroger bounced 2 cents higher to $19.94, but the S&P retail food index slumped 3.30 percent.

Stocks are still down for the year as the economy flounders in recession, but the market took flight this fall on hopes of economic growth next year. Investors are confident of a turnaround in 2002, but worry stocks have rallied too far since hitting three-year lows on Sept. 21.

"Hopefully we are at the beginning stages of an economic recovery, but the jury is still out as to whether things have really turned around," said James Volk, co-director of institutional trading at D.A. Davidson and Co.

Power producer Calpine Corp. , which has seen its stock plunge in the wake of the collapse of energy trader Enron Corp. , cut early losses and ended up 41 cents at $15.91, after having lost as much as 30 percent in early trading. Dynegy Inc. , which pulled out of a merger with Enron, lost 84 cents to $25.11.

Declining issues outnumbered advancers 8 to 7 on the New York Stock Exchange. Volume was heavy. 

The Russell 2000 index, which tracks smaller company stocks, advanced 0.55, or 0.1 percent, to 475.32. 

Overseas, markets were mixed Wednesday. Japan's Nikkei stock average closed up 3.1 percent. In Europe, France's CAC-40 finished down 0.9 percent, Britain's FT-SE 100 fell 0.8 percent and Germany's DAX index declined 1.6 percent.

Reuters and the associated Press contributed to this report.