Stocks staged a late rally today on Wall Street after a day of wild swings as investors continued to weigh the impact of the crunch in the American credit market.

Shortly after noon, the Dow Jones industrial average was off by more than 340 points, or 2.6 percent, following big declines in Asian and European trading. But after reversing field several times, the market recovered its losses in the final hour.

At the close, the Dow was off 15.69 points for the day, or 0.1 percent. The Standard & Poor’s 500-stock index was showing a gain, and the Nasdaq composite was down only slightly.

“It was a pretty remarkable turn, and I don’t think anybody can really make sense of it,” said Tobias M. Levkovich, chief United States equity strategist for Citigroup. “It’s not about any fundamental development because we didn’t get any news today that would push you any one way or another.”

In the course of the day, all three indexes were showing losses of more than 10 percent since their peak last month — the threshold at which the market’s fall is considered to have reached a correction. But by the close, they had escaped that territory.

The upheaval came amid a bruising week for stocks, and a day after the market plunged in the final hour of trading, with the Dow closing off 167 points and the S.& P. 500 erasing its own gains for the year.

That set the tone for a wild ride in foreign financial markets overnight. The main stock indexes in nearly every developed nation around the world closed lower or were headed toward finishing the day in the red.

The sell-off on Wall Street was so steep that at 12:01 p.m., the New York Stock Exchange imposed limits on automated program trading, known as a circuit breaker, a move intended to prevent bigger declines.

Even with the late rally, share values of blue-chip companies like Apple, Exxon Mobil, Boeing and I.B.M. still suffered significant losses.

Adding to an already tense environment, more problems became apparent in the mortgage market today. Countrywide Financial, the nation’s largest mortgage lender, said it had tapped $11.5 billion in emergency loans from 40 of the world’s largest banks, as it seeks to shore up its cash position.

The company, which relies heavily on raising money from Wall Street, acted a day after a prominent analyst suggested it may have to file for bankruptcy if banks and investors shut off the spigot of money to Countrywide. Shares of the company closed down 11 percent, after falling 13 percent yesterday. The stock is down more than 50 percent for the year.

In a statement released early this morning, the company also said that 90 percent of the home loans it will now make will be to standards set by Fannie Mae and Freddie Mac, the big purchasers of mortgage loans, because it is not able to sell them to other buyers.

The reversal of fortune in the housing market was further illustrated by figures released by the Commerce Department today that showed the rates of construction of new homes and building permits issued fell in July to their lowest levels in more than a decade.

A move by the Federal Reserve intended to calm the markets seemed to have little impact at first. The Fed injected $17 billion into the system this morning in two open-market actions by lending against mortgage securities.

Whether the turbulence in financial markets will have larger ramifications for the American economy is still unclear. Many economists, including those at the Fed, have said they believe the damage will remain contained. With each day of turmoil in the markets, however, the outlook becomes more and more murky.

Henry Paulson, the Treasury secretary, told The Wall Street Journal in an interview published today that market troubles “will extract a penalty” on economic growth, but he said he did not believe a recession was likely.

The market tumult seemed to put a dent in oil prices today. On the New York Mercantile Exchange, oil futures contracts declined even as two tropical disturbances grew more powerful in the Atlantic.

In Europe today, the FTSE-100 in London closed down more than 4 percent, while the CAC-40 of France dropped 3.3 percent and the DAX in Germany was down more than 2 percent. The Asian slump was led by a nearly 7 percent decline in South Korea as nervousness spreading there from finance professionals to ordinary small investors.

“The psychology is shifting notably today,” said David Bowers, a global strategist at Absolute Strategy Research in London. “When a market drops by 10 percent, people start to feel it in their portfolios. People are used to stock markets behaving in a non-volatile and even bullish manner.”

In Europe, shares of banking stocks were hard-hit as equity markets retreated. The worst-hit included BNP Paribas, which last week sparked a market rout when it revealed it had frozen three funds in subprime mortgages had been invested. Shares were down 2.9 percent at midday. ABN Amro, the target of a takeover battle that would create the world’s largest bank, fell 1.3 percent at midday.

And fears that the credit crunch might make it harder to finance deals hit the Dutch chemicals group Akzo Nobel, whose shares slid 3.1 percent midday on concerns that Henkel, its partner in the takeover of Britain’s ICI would have trouble financing its part of the deal, Reuters reported.

Concerns are beginning to mount that the subprime crisis may generate a consumer pullback in the United States, triggering an economic slowdown that may hit America’s export partners.

“Although today will likely again be dominated by concerns over credit markets, at some point the concerns will move to consumer confidence, consumption and the global economy,” ABN Amro said in a note to clients.

The losses reverberated most sharply in Asia, where investors were also shaken after Rams Home Loans Group of Australia, a nonbank lender which earlier in the week warned that its earnings could be hurt by rising costs for its U.S. borrowings, confirmed Thursday that it had been unable to refinance $5 billion in debt.

“It’s a kind of a panic among individual investors,” said Cho Hong Rae, head of research at Korea Investment & Securities in Seoul, adding that domestic retail investors had up until today generally been buying shares as they declined.

The South Korean benchmark stock index suffered its biggest decline in more than five years today, falling nearly 7 percent late in the afternoon in Asia after an initial 10 percent plunge that forced the Korea Exchange to suspend trading for 20 minutes.

Similar declines occurred in Indonesia and the Philippines, where stocks also fell by roughly 7.7 percent and 6 percent, respectively. Declines in the region’s other big markets were less severe, but still dramatic: Japan’s benchmark Nikkei 225 stock average fell by about 2 percent; and Hong Kong’s benchmark dropped by about 3.5 percent.

Chinese stocks were lower too. During recent trading sessions, they have brushed off drops in other parts of the world.

Analysts in Australia said Rams’s problems were unlikely to have much effect on the country’s banks, because they do not rely significantly on borrowing from the United States.

“In the end the impact on them will not be so severe,” said Ben Zucker, an analyst at Macquarie Bank in Sydney.

Nonetheless, companies and financial institutions that had taken advantage of a booming American appetite for debt to borrow United States dollars cheaply and fund costs at home in Australia where the currency has been appreciating are likely to suffer a sudden whiplash effect now as interest rates rise and the United States dollar regains ground, he said.

In South Korea, Mr. Cho said that most domestic selling was still by individuals trying to unload individual stocks. So far, he said, local mutual funds were not seeing a market increase in redemptions that would force them to join the selling. And automatic contributions to pension funds were still being made to big institutions, which were taking advantage of the latest declines to buy stocks more cheaply, he said.