Fears of recession are trumping fears of inflation.

A crucial barometer of inflation came in flat last month, temporarily halting Wall Street's slide. But stocks seesawed, turning mixed in midday trading Thursday. Stock prices fell globally, credit markets remained tight and oil prices declined to a 14-month low.

After more than a month of unprecedented government intervention, it's unclear what policymakers can do next to calm markets. Treasury Secretary Henry Paulson said Thursday that he's not proud of the mistakes leading up to the crisis, but insisted the administration is pursuing the right course to end it.

Federal Reserve Chairman Ben Bernanke has left the door open for another rate cut, saying Wednesday that inflation pressures are moderating, but the Fed's emergency half point cut on Oct. 8, which brought its target short-term rates to 1.5 percent, did little to affect the actual rates banks charge borrowers and each other, which remain dramatically higher.

The availability of short-term commercial paper loans -- which businesses use to buy raw material and pay workers -- fell for the fifth straight week, according to the Federal Reserve.

On Wednesday, the Dow saw its 20th triple-digit swing in the past 23 trading sessions, an unprecedented run of volatility. The Dow has finished higher on only one day this month. The loss of 733 points was the second-worst ever for the average, topped only by a 778-point decline Sept. 29.

Stocks lost $1.1 trillion Wednesday. Since Oct. 9, 2007, when the Dow high topped 14,000, investors have lost $8.3 trillion from pension funds, college savings plans, 401(k)s and other investments.

Crude oil fell almost $4 a barrel to $70.63.

"The market is just very worried about a severe international economic downturn," said David Moore, commodity strategist at Commonwealth Bank of Australia in Sydney.

The U.S. economy is suffering from a litany of woes: falling wages, weak consumer spending, tight credit, slumping home prices and rising job losses. While the number of new people signing up for unemployment benefits last week dropped, new claims still totaled 461,000 -- a figure associated with deep troubles in employment conditions.

Citigroup Inc. reported its fourth straight quarterly loss Thursday. The bank said it had cut 11,000 jobs in the third quarter, bringing its job cuts for the year to 23,000.

Coming economic data on housing, consumer spending, manufacturing and employment are "apt to show either stagnation at depressed levels or substantial further deterioration," Goldman Sachs economist Seamus Smyth said in a report.

The economy might not recover until 2010, Donald Kohn, vice chairman of the Federal Reserve, said Wednesday evening.

The plunge in stocks put the nation's economic anxiety front-and-center as the two major presidential candidates, Sens. Barack Obama and John McCain, squared off in their final debate Wednesday night in Hempstead, N.Y.

McCain used the debate to accuse Obama of waging class warfare by advocating tax increases designed to "spread the wealth around." The Democrat denied it, and countered that he favors tax reductions for 95 percent of Americans.

Earlier this week, after governments around the world announced plans to use trillions of dollars to prop up banks, including a U.S. plan to buy about $250 billion in bank stocks, the market appeared to be turning around -- or at least calming down.

Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke have expressed confidence that the government's radical efforts to stabilize the financial system and induce banks to lend again will eventually help the economy.

But Bernanke warned that even if financial markets calm, the nation will not snap back to economic health quickly.

"Stabilization of the financial markets is a critical first step, but even if they stabilize as we hope they will, broader economic recovery will not happen right away," Bernanke told the Economic Club of New York on Wednesday.

President Bush plans to speak on the financial crisis early Friday -- before U.S. markets open -- at the U.S. Chamber of Commerce headquarters across from the White House. Officials said the speech wasn't intended to put forward new policy actions, but rather would give the nation a more detailed explanation of what the government is doing to combat the crisis.

Leaders of the world's top economic powers, the Group of Eight, said they would meet "in the near future" for a global summit to tackle the financial crisis. The group comprises the United States, Japan, Germany, France, Britain, Italy, Canada and Russia.

British Prime Minister Gordon Brown said the meeting could be held next month. He said the discussions should include not only the world's richest nations but also major emerging economies such as China and India.

The current financial crisis began more than a year ago in the United States when lax lending standards on certain home mortgages came home to roost. Foreclosures skyrocketed, mortgage securities soured and financial companies racked up huge losses.