The stock market was relieved after Bear Stearns Cos. Chief Financial Officer Sam Molinaro said Wednesday the investment bank's leveraged finance business is improving. He said the company expects to take a $1.2 billion writedown during the fourth quarter, which eased worries of even higher losses.

Wednesday's news followed reassuring comments from Goldman Sachs Group Inc.'s chief executive about its own credit exposure that helped propel the Dow Jones industrials up nearly 320 points on Tuesday.

But there are signs that tight credit is not something that is going away anytime soon. Britain's HSBC Holdings PLC did say Wednesday it would have to write down a further $3.4 billion from its U.S. business during the third quarter because of exposure to subprime loans, after writing down billions earlier in the year.

"At the very short-term, some fear has diminished. But I don't know if the fear has been taken away," said Kim Caughey, equity research analyst at Fort Pitt Capital Group in Pittsburgh.

And meanwhile, after plunging on Tuesday, oil prices resumed their climb Wednesday, raising concerns that inflation risks could prevent the Federal Reserve from lowering rates to calm the shaky market.

In the last half-hour of trading, the Dow fell 35.36, or 0.27 percent, to 13,371.73, after bobbing in and out of positive territory.

Broader stock indicators also fell. The Standard & Poor's 500 index fell 5.88, or 0.40 percent, to 1,475.17, while the Nasdaq composite index fell 24.85, or 0.93 percent, to 2,648.80.

Treasury bonds dipped as investors grew more optimistic about stocks. The 10-year Treasury note's yield, which moves in the opposite direction of its price, rose to 4.28 percent, up from 4.26 percent late Tuesday.

Gold prices rose, while the dollar was mixed against rival currencies.

The Labor Department reported wholesale prices registered a slight gain in October, held down by a drop in energy costs. The moderation in inflation could be temporary, however, with oil prices surging to fresh records of around $98 a barrel in early November.

A barrel of light sweet crude rose $2.92 to settle at $94.09 a barrel on the New York Mercantile Exchange , after plunging Tuesday by $3.45.

And while the wholesale price report suggests the Fed could afford to lower rates further when it meets on Dec. 11, the central bank did indicate after its Oct. 30-31 meeting — where it cut rates by a quarter-point — that it was satisfied with the current state of the economy and still concerned about rising inflation.

Meanwhile, the Commerce Department reported retail sales managed a small increase in October as consumers struggled to cope with a steep slump in housing, volatile financial markets and soaring energy costs. It was the weakest showing since August and represented a significant slowdown from September.

Advancing issues narrowly outnumbered decliners on the New York Stock Exchange, where volume came to 1.4 billion shares.

The Russell 2000 index of smaller companies fell 7.87, or 1 percent, to 781.28.

Overseas, Japan's Nikkei stock average closed up 2.47 percent and Hong Kong's Hang Seng index rose 4.90 percent. In Europe, Britain's FTSE 100 added 1.10 percent, Germany's DAX index rose 0.07 percent, while France's CAC-40 rose 1.35 percent.

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