Stocks Notch Gain In Day of Turbulent Trading

NEW YORK, Sept. 16 -- Wall Street ended another tumultuous session with a sizable gain Tuesday, partly recovering from its worst sell-off in years after the Federal Reserve said it was keeping interest rates steady. Speculation that troubled insurer American International Group might come up with a much-needed cash injection made room for many financial stocks to rally.

The Dow Jones industrial average rose 141.51, or 1.30 percent, to 11,059.02, after falling about 100 points immediately after the Fed announcement. Its 504-point drop Monday was its worst since the September 2001 terrorist attacks. As one of the 30 stocks that make up the Dow, AIG's stock fluctuations tugged at the blue chips throughout the session. The Dow at turns rose and fell as much as 175 points.

The Standard & Poor's 500-stock index rose 20.90, or 1.75 percent, to 1213.60, and the Nasdaq composite index rose 27.99, or 1.28 percent, to 2207.90.

Meanwhile, the Fed's decision, while not popular with investors clamoring for a rate cut to boost market sentiment, appeared to sidestep any second-guessing about the health of the economy. The Fed, acknowledging strains upon the financial markets, reminded investors that it had taken steps to add more cash to the banking system.

Concern about the well-being of AIG intensified this week after several ratings agencies downgraded the company's credit, in turn forcing the insurer to come up with more capital. Investors fear that a failure by the world's largest insurer would fan the financial turmoil.

Light, sweet crude fell $3.70, to settle at $92.01 a barrel on the New York Mercantile Exchange, bringing its two-day decline to $10, as investors placed bets that a slowing economy will crimp demand.

The Labor Department reported the first drop in the consumer price index in nearly two years. Inflation fell 0.1 percent last month, while the index excluding food and energy costs edged up 0.2 percent.

Movers

AIG fell $1.01, to $3.75, after trading as low as $1.25.

Goldman Sachs fell $2.49, to $133.01, after posting its sharpest earnings decline since 1999.