Wall Street recovered from an earlier plunge to finish narrowly mixed Thursday as investors attempted to rally from a week of losses fueled by concerns that higher interest rates will strain the global economy.

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At the close, the Dow rose 7.92, or 0.07 percent, to 10,938.82. The Dow lost almost 330 points from Friday through Wednesday.

Broader stock indicators recouped earlier losses and ended mixed. The Standard & Poor's 500 index added 1.78, or 0.14 percent, to 1,257.93, while the Nasdaq composite index fell 6.48, or 0.3 percent, to 2,145.32.

Persistent inflation and rate worries pushed stocks substantially lower during the session, with the Dow Jones industrials dropping more than 173 points at midday. But bargain hunters entered the market late in the day and took advantage of relatively cheap stock prices.

The market's comeback helped draw attention from rate increases by the European Central Bank, South Korea and India. This week's signals that the Federal Reserve would sacrifice economic growth to keep boosting rates and stem inflation saddled U.S. stocks and led steep declines in markets worldwide.

"The heavy trading volume today was a good indication that we were nearing the end of this decline," said Peter Cardillo, chief strategist at S.W. Bach & Co. "I think the market is probably going to begin to stabilize over the next couple of days."

Oil prices dipped following the death of Iraq's main terrorist leader, and the U.S. dollar gained ground against the Japanese yen. However, investors were kept on edge by an inversion of short- and long-term bond yields.

Declining issues outpaced advancers by about 3 to 2 on the New York Stock Exchange, where volume of 2.56 billion shares handily beat the 1.84 billion shares that changed hands on Wednesday.

A jittery bond market added to Wall Street's uncertainty as short-term yields overtook long-term rates for the first time since March, a sign of weakening confidence in holding long-term debt. The yield on the 10-year Treasury note slid to 5.01 percent from 5.02 percent late Wednesday, while the 2-year Treasury yield stayed flat at 5.01 percent.

Elsewhere, the U.S. dollar jumped against the Japanese yen but was flat versus European currencies, and gold prices tailed off to about $615 an ounce. The death of the Al Qaeda leader in Iraq and easing political tensions in Nigeria and Iran sent a barrel of light crude tumbling 47 cents to $70.35 on the New York Mercantile Exchange.

Fears that higher interest rates will hinder global demand haunted overseas stock markets. Japan's Nikkei stock average plunged 3.07 percent; Britain's FTSE 100 sank 2.51 percent, Germany's DAX index dropped 2.9 percent and France's CAC-40 was lower by 2.91 percent.

The lack of economic news this week left investors with virtually no direction on the economy and whether the Fed will prolong its program of rate hikes at its June 28-29 policy meeting. Next week's reports on wholesale and consumer prices should bring evidence of whether surging energy costs have driven up prices in other areas — the Fed's chief reason for continuing to raise lending rates.

"The global anti-inflation theme has intensified," said Alan Gayle, senior investment strategist for Trusco Capital Management. "It's clearly a sign that central banks are very focused on inflation, and that they're going to raise interest rates so both inflation and inflation expectations are contained."

Investors brushed aside the day's economic data. The Labor Department said first-time applications for jobless benefits fell by 35,000 to 302,000 last week, well below the 330,000 claims predicted by economists. Meanwhile, the Commerce Department said wholesale inventories grew 0.9 percent in April, almost twice the estimated 0.5 percent rise.

In corporate news, General Motors Corp. (GM) fell 16 cents to $24.83 after The Wall Street Journal reported that the automaker has made significant progress in restructuring the workforce at its former parts unit, Delphi Corp.

Intel Corp. (INTC) and Advance Micro Devices Inc. faced losses and weighed on the tech sector after Citigroup (C) analysts warned that an escalating price war among chipmakers would cut into the companies' earnings. Intel lost 28 cents to $17.11, and AMD dropped 97 cents to $27.03.

McDonald's Corp. (MCD) said its worldwide same-store sales grew 5.5 percent in May, lifted by moderate gains in the United States, Europe and Asia. McDonald's added 37 cents to $33.69.

The Russell 2000 index of smaller companies slid 0.25, or 0.04 percent, to 706.53.

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