Stocks rallied in the afternoon to recover big early losses, buoyed by a prediction from Standard & Poors that the end was in sight for banks' subprime writedowns. The Dow—at one point down more than 230 points—finished up 35.5 points to close at 12,145.74, MarketWatch reports. The Nasdaq gained 19.74 points to end at 2,263.61, and the S&P 500 rose 6.7 points to 1,315.47.
The day opened on a sour note with news that equity firm Carlyle Capital couldn’t reach an agreement with lenders and would probably have its assets seized. Investors were then heartened by a report from S&P said that writedowns related to the subprime mess would top $285 billion, but that the financial system had largely worked through the crisis. "The end of writedowns is now in sight for large financial institutions," it said.