Stocks recovered slightly Wednesday from steep losses a day earlier amid hopes that the Federal Reserve will cut interest rates again, but the markets still ended the day down after Merrill Lynch & Company reported losses and disappointing existing home sales figures. The Dow Jones industrial average fell by as much as 200 points at one point in morning trading but improved later in the day amid speculation that the Federal Reserve might be encouraged to cut a key interest rate. The trading day generally brought only bad news, however, with Merrill Lynch reporting that it wrote down $7.9 billion in fixed-income instruments called collateralized debt obligations and from defaulting subprime mortgages. The figure was substantially more than the $5 billion estimate the company, the biggest brokerage firm in the world, had estimated earlier this month. According to preliminary calculations, the Dow closed down 0.98, or 0.01 percent, at 13,675.25. Broader stock indicators also fell, but were up from trading session lows. The Standard & Poor's 500 index fell 3.71, or 0.24 percent, to 1,515.88, while the technology-dominated Nasdaq composite index lost 24.50, or 0.88 percent, to 2,774.76. The Russell 2000 fell 7.68 to close at 810.85, while the New York Stock Exchange composite fell 31.69 to 10,009.30. The American Stock Exchange composite closed down 12.48 at 2,440.92. The price of a barrel of light, sweet crude oil for November delivery rose $1.83 to $87.10.
