The Dow erased much of an earlier 209-point drop after a stronger-than-expected reading of the Institute for Supply Management's assessment of manufacturing activity. Mark Lennihan • Associated Press

Wall Street, still jumpy from Tuesday's big selloff, closed modestly lower Thursday after rebounding from an early-session plunge. Investors' worries about a sudden economic slowdown were calmed somewhat by data showing an expansion in manufacturing activity.

The Dow Jones industrial average fell 34.29, or 0.28 percent, to 12,234.34.

The Standard & Poor's 500 index lost 3.65, or 0.26 percent, to 1,403.17.

The Nasdaq composite index declined 11.94, or 0.49 percent, at 2,404.21.

For the week:

The Dow is down 413.14, or 3.27 percent.

The S&P is down 48.02, or 3.31 percent.

The Nasdaq is down 110.89, or 4.41 percent.

For the year:

The Dow is down 228.81, or 1.84 percent.

The S&P is down 15.13, or 1.07 percent.

The Nasdaq is down 11.08, or 0.46 percent.

Worldwide roundup

European and Asian stock markets fell for the third straight session on Thursday on continued unease about the global economy, but some relief was seen as U.S. stocks recovered from an opening plunge.

A still skittish Wall Street closed modestly lower Thursday, having clawed its way back from an early-session plunge as upbeat manufacturing data allayed fears about a flagging U.S. economy.

The Dow Jones industrials ended down 34.29 points, or 0.28 percent, at 12,234.34 after tumbling 209 points in early trading and then briefly reaching positive territory in the afternoon.

Shares were mixed elsewhere in the Americas. In Brazil, Sao Paulo's Bovespa index closed down 0.75 percent. Mexico City's IPC index was up 0.6 percent, and the IPSA index in Santiago, Chile ended 0.6 percent higher. In Buenos Aires, Argentina, the Merval dropped 1.4 percent.

Declines were widespread in Europe, where the U.K.'s benchmark FTSE 100 declined 0.9 percent to 6,116.00, while France's CAC 40 lost 1.1 percent to 5,458.40. Germany's DAX Index dropped 1.1 percent to 6,640.24.

Emerging markets also suffered. After early gains Thursday morning, Russia's benchmark RTS index headed south in the afternoon and closed down 3.3 percent.

Europe's major indexes had been higher after a rebound on Wall Street a day earlier and upbeat comments from the U.S. Federal Reserve chairman. But, the plunge in U.S. stocks during afternoon trading eroded Europe's gains.

"I think it's wholly psychological; nothing has actually changed," said Philip Manduca, managing partner at Titanium Capital in London. "The Chinese stock market is not an indicator of the Chinese economy. The Chinese economy is not an indicator of the world economy."

Still, a selloff could trigger more losses in Asia, said Yuji Nakagawa, head of derivatives at Toyo Securities in Tokyo.

Shares in Japan, Australia, Taiwan, Hong Kong, Singapore and Malaysia all retreated mildly, while the Shanghai market — whose plunge Tuesday triggered a global sell-off — fell another 2.9 percent.

But markets in the Philippines, New Zealand, India and Indonesia rebounded.

The losses underlined lingering worries about the outlook for the U.S. and global economy as well as overvalued stock prices. While analysts said the global jolt was most likely a correction to cool surging markets, some said market volatility could persist for months.

But Asia, the epicenter of the meltdown, is seen as especially vulnerable because its markets have surged in recent months and its export-oriented economies rely heavily on U.S. demand.

"Asia and Japan are highly dependent on the U.S. economy," said Shun Maruyama, an equity strategist with Credit Suisse in Tokyo. "Stocks need some more time to return to a rising trend."

On the region's biggest bourse, the Tokyo Stock Exchange, the benchmark Nikkei 225 Index fell 0.9 percent to finish at 17,453.51 after being down by as much as 1.5 percent.

Hong Kong stocks fell 1.6 percent, while Malaysia's key index fell 1.3 percent. Australian shares shed 0.4 percent and Singapore closed down 0.4 percent. In Taiwan, which was closed Wednesday and missed the market selloff, the benchmark index plunged 2.8 percent.

On mainland China, stocks continued their roller-coaster ride, with the Shanghai Composite Index falling 2.9 percent to close at 2,797.19 on Thursday. The index had tumbled 8.8 percent Tuesday, sparking a global financial market sell-off, before rebounding nearly 4 percent Wednesday.

"Investors are becoming wary after the unexpected equity market turmoil earlier in the week, rendering the market particularly vulnerable to any news," said Zhang Yidong, an analyst at Industrial Securities in China.