Markets, rattled by Europe, stage big rally at end of day

NEW YORK – A big final-hour comeback pulled the Dow Jones industrial average nearly back to where it started Wednesday.

The Dow was down as much as 191 points earlier as the threat of a financial crisis spreading from Europe shook markets. The euro dropped to a nearly two-year low against the dollar, and oil prices sank to their lowest this year.

But a late surge of buying erased nearly all of the Dow’s deficit, leaving it down just 6.66 points at 12,496.15 by the end of the day. Other indexes ended slightly higher.

In the last hour of trading, news arrived that the leaders of France and Italy favored using regionwide bonds to support Europe’s economy. That gave traders hope that a summit of European leaders might produce concrete steps to tackle the economic morass there. The Organization for Economic Cooperation and Development warned Tuesday that the 17 countries that use the euro risk falling into a “severe recession.”

Analysts and investors have turned increasingly skeptical this month that European leaders will prevent Greece from dropping the euro or agree on ways to jump-start the region’s economy.

The Standard & Poor’s 500 index rose 2.23 points to 1,318.86. The Nasdaq rose 11.04 points to 2,850.12. 

Amid sluggish PC sales, Hewlett-Packard to slash 27,000 jobs

SAN FRANCISCO – Hewlett-Packard Co. plans to jettison 27,000 workers as the growing popularity of smartphones, the iPad and other mobile devices makes it tougher for the company to sell personal computers.

The cuts announced Wednesday represent HP’s largest payroll purge in its 73-year history. The reductions will affect about 8 percent of HP’s nearly 350,000 employees by the time the overhaul is completed in October 2014.

HP hopes to avoid as many layoffs as possible by offering early retirement packages.

The company, based in Palo Alto, Calif., expects to save as much as $3.5 billion annually from the job cuts and other austerity measures. HP CEO Meg Whitman plans to funnel most of the savings into developing more products and services that could help the company adapt to technological shifts that are driving demand for more mobile computing and the software provided over high-speed Internet connections. 

Slide continues as oil price falls below $90 per barrel

NEW YORK – The price of oil dropped below $90 per barrel Wednesday, the latest milestone in a weeks-long decline brought on by uncertainty surrounding economies from Europe to China.

Benchmark U.S. crude fell by $1.95 to end at $89.90 per barrel. Oil has tumbled more than 15 percent this month and is at its lowest level since Oct. 21. Other commodities such as copper and cotton fell sharply as well. Stock markets in Asia and Europe fell sharply, while U.S. markets erased most losses with a late-day rally.

Analysts say oil is in an extended slump that should lead to cheaper gasoline and other petroleum-based fuels this summer. Gasoline, which is made from oil, already has dropped by nearly 26 cents per gallon since early April. The national average is now $3.68 per gallon, and the Maine statewide average is $3.76.