Financial markets remained tense today after efforts to approve a $700 billion federal banking bailout ran into opposition from Republican...

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NEW YORK — Financial markets remained tense today after efforts to approve a $700 billion federal banking bailout ran into opposition from Republican lawmakers. Stocks ended mixed, with big financial companies lifting the Dow Jones industrial average, but worries about smaller banks and parts of the technology sector taking much of the market lower.

The Dow Jones industrials closed up 121.07, or 1.1 percent, at 11,143.13, after having fallen as much as 152 points early in the session.

Microsoft, one of the 30 Dow stocks, advanced 79 cents, or 3 percent, to close at $27.40. Boeing, also a Dow stock, gained 90 cents, or 1.6 percent, at $58.32

The Standard & Poor’s 500 index ended up 4.09, or 0.3 percent, at 1,213.27, and the technology-heavy Nasdaq composite index fell 3.23, or 0.2 percent, to 2,183.34.

Investors turned cautious as the Bush administration’s efforts to come up with a rescue package faced setbacks. On Thursday, Republican lawmakers rejected the emergency rescue package over concerns about the price tag of the White House-backed proposal. This came hours after congressional leaders from both parties announced they were nearing agreement on a deal.

Shortly after this morning’s opening bell on Wall Street, President Bush said at the White House that lawmakers can express doubts but ultimately should “rise to the occasion” and approve a plan to stave off what he sees as an economic calamity. Congressional leaders also spoke out in favor of the plan.

The rescue is designed to remove billions of dollars of bad mortgages and other now-toxic assets from the books of financial firms in a bid to free up lending. Tight lending conditions make it harder and more expensive for businesses and consumers to borrow money, a headwind for the economy. In a last-minute shake up, some Republican lawmakers want an alternative plan under which the government would provide insurance to companies that agree to hold frozen assets, rather than have the U.S. purchase the assets.

With the prospects of a deal uncertain, negotiations in Washington were continuing as investors kept close watch on the proceedings.

“I think the markets are on pause trying to figure out where this is going to go. Congress is still there,” said Mark Coffelt, portfolio manager at Empiric Funds in Austin, Texas. “Right now everyone is a little bit shellshocked.”

Credit markets remained strained, though they showed improvement. The yield on the 3-month Treasury bill, considered the safest short-term investment, rose to 0.85 percent from 0.72 percent late Thursday. The lower the yield on a T-bill, the more desperation there is in the market; investors are at times willing to take the slimmest returns to preserve their principal.

The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.80 percent from 3.84 percent late Thursday.

Stocks declined unevenly, with technology shares falling sharply after Research In Motion warned late Thursday that its gross margins would contract in the current quarter because of the costs for producing three new BlackBerry models. The stock fell $26.77, or 27 percent, to close at $70.76.

In late trading, light, sweet crude for November delivery fell $2.86 to $105.16 on the New York Mercantile Exchange.

Uncertainty over the bailout package left the dollar mixed against other major currencies. Gold prices rose.

Coffelt said the market would take a hit if a bailout doesn’t materialize, though he said the broader fear is that tightness in credit markets would make any decline more severe.

“If it doesn’t go through I think the markets probably get slapped — probably 1,000 points — but then we’ll work our way out of it,” he said, referring to a drop the Dow industrials could see.

The market was also uneasy after Washington Mutual became the largest U.S. bank to fail. The Federal Deposit Insurance Corp. seized WaMu on Thursday and then sold the thrift’s banking assets to JPMorgan Chase for $1.9 billion. It was the latest financial firm to collapse under the weight of enormous bad bets on the mortgage market.

Although WaMu’s failure was expected, it nonetheless underscored for investors how widespread the problems are in the financial sector.

Coffelt noted, however, that the market appeared to take some comfort from the orderly fall of WaMu. Several analysts praised the move as a wise takeover for JPMorgan. JPMorgan stock rose $4.78, or 11 percent, to close at $48.24.