"Today it seems there is a comfort level in certain sectors that have exposure outside the U.S. that can weather the storm... and offset the residential or consumer side," said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank.
After dropping more than 100 points during the session, the Dow Industrial Average ended 41.1 points, or 0.3%, ahead, at 13,518.
Of the blue-chip index's 30 components, 17 ended higher, with the late-session move up led by Honeywell , which climbed 5% after the manufacturer said it expects to meet or beat its earnings target for next year. .
The Dow's laggards included its financials stocks, with Citigroup Inc. down 1.5%, J.P. Morgan Chase Co. off 0.9%, and American Express Co. closing down 0.4%.
"The banks will likely need some more time before they are comfortable playing in the same sandbox again and who can blame them," said Kevin Giddis, managing director, Morgan Keegan & Co.
"Each day one more bank comes clean that the subprime issue is deeper, wider and hairier than they originally thought or were providing cash for."
The broader stock indexes closed mixed, with the S&P 500 up 1.82 points, or 0.1%, to 1,488.41, and the Nasdaq Composite shedding 2.65 points, or 0.1%, to 2,668.49.
On the New York Mercantile Exchange, crude-oil futures ended down $2.14 at $92.25 a barrel, while gold futures dropped $14.8 to finish at $804 an ounce. . .
The dollar, however, gained on the euro, yen and pound. .
And, Treasury prices extended losses, pushing yields up. .
Volume on the New York Stock Exchange hit 1.4 million and losing stocks outran those advancing 2 to 1. On the Nasdaq, more than 2.1 billion shares traded hands, and declining issues ran ahead of advancers about 3 to 1.
The Fed's aggressive plan announced Wednesday to pump money into the global banking system is not expected to immediately trickle down to the consumer level, experts said. .
"We are not going to see the benefit of what the Fed does this week until sometime later this month," said Paul Nolte, director of investments at Hinsdale Associates. .
Early data included a Labor Department report that the producer price index, which measures inflation at the wholesale level, climbed 3.2% in November, the largest rise in more than three decades.
The rise in producer prices proved "much more than we had expected, and our forecast was well above the consensus," said RBS Greenwich Capital senior economist Michell Girard.
A separate Labor Department report had weekly jobless claims declining, although some economists pointed to an overall upward trend, despite the recent drop. .
In a piece of purely positive data, the Commerce Department said retail sales jumped the most in six months in November, climbing a better-than-expected 1.2% in November, the best gain in six months.
Shares of Lehman Brothers Holdings Inc. ended 0.5% down after the banking giant said fourth-quarter profit fell for a third straight quarter in its longest-steak of consecutive quarterly losses since 2002.
Costco Wholesale said fiscal first-quarter profit grew 11%, meeting analyst estimates, while Jos A. Bank Clothiers reported a 29% profit rise and improved margins.
Biogen Idec Inc. shares plunged, closing 24% lower, after the biotechnology giant said a search for potential buyers failed to turn up suitors.
And, Moneygram International Inc. confirmed an unsolicited offer from Euronext Worldwide Inc. , but said discussions between the parties broke down and that it's talking to potential investors regaring financing alternatives.
Overseas, European markets declined with banks under pressure, while Japanese stocks fell sharply. ,
By Kate Gibson