Wall Street pulled off a stunning comeback Wednesday, surging higher in late trading and wiping out what looked to be yet another massive...

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NEW YORK — Wall Street pulled off a stunning comeback Wednesday, surging higher in late trading and wiping out what looked to be yet another massive decline. The Dow Jones industrials, down more than 323 points in earlier trading, ended the day with an advance of just under 300 points.

Such volatility has become a hallmark of Wall Street’s performance in recent months amid the housing and credit crisis and growing fears of recession. And, after five straight days of pullbacks, a rebound was to be expected.

The Dow gained 298.98, or 2.5 percent, to 12,270.17.

The two Northwest companies included in the 30 Dow stocks didn’t follow the trend, however: Microsoft slipped 6 cents to close at $31.93; Boeing fell $1.03 to $76.57.

Before Wednesday’s session, the Dow had fallen nearly 10 percent since the start of the year, and it was down more than 15 percent since its record close of 14,164.53 on Oct. 9.

Wednesday’s swing from negative to positive territory of 631.86 points is the largest point swing since July 24, 2002, according to Dow Jones Indexes. The largest intraday point swing, a metric that Dow started calculating in July 1995, was a 721-point swing on April 14, 2000.

Broader stock indicators also surged. The Standard & Poor’s 500 index rose 28.10, or 2.1 percent, to 1,338.60, while the Nasdaq composite index rose 24.14, or 1 percent, to 2,316.41.

At its lowest point Tuesday, the Dow was 17.9 percent below its October closing high, meaning that the stock market has come perilously close to the bear-market threshold of 20 percent. It’s unclear whether Wall Street will indeed keep falling and officially enter a bear period, or whether it is bottoming out.

Buying, like selling, can feed on itself and investors may go into the market to be sure they don’t miss out on a rally. What needs to be seen is whether these gains will easily be knocked down again.

“Volatility is certainly the norm now and not the exception,” said Art Hogan, chief market strategist at Jefferies. “We have had 14 trading days so far this year and only two of them have been without a triple-digit swing (in the Dow). Three of those days have had 300-point swings.”

Wall Street faces several months of uncertainty, with the bulk of fourth-quarter earnings reports still to come and with economic reports likely to be disappointing. When it’s more clear that companies and consumers are spending freely, investors might relax.

However, with consumers burdened by debt and cutting back their spending, it’s impossible to predict when that relief will come.

The Federal Reserve’s decision Tuesday to lower its benchmark federal-funds rate by 0.75 percentage point to 3.5 percent, while met with some skepticism, did give intrepid investors a reason to buy Wednesday.

“You might say this is a belated reaction to what the Fed did this week, compounded by hopes for the Fed to do more next week,” said Peter Cardillo, chief market economist at Avalon Partners.

Rate cuts are designed to stimulate borrowing and, in turn, business activity and the overall economy.

They also will eventually boost profit margins for banks and other lenders, which have been working to lower costs and raise cash levels through layoffs and stock sales after having lost billions of dollars to bad mortgages and mortgage-related investments.

Those companies — including Citigroup, Washington Mutual and Merrill Lynch — were the big winners Wednesday.

Shares of Seattle-based Washington Mutual shares gained $1.33 to $16.10.

“The early leaders in a market recovery tend to be banks, REITs (real estate investment trusts) and homebuilders, as these are the groups that typically would benefit first from a turnaround. And those have been the market leaders this week,” said Steve Goldman, chief market strategist at Weeden. “What has happened is the Fed is flooding the system with liquidity and eventually we should see some traction in the economy. And stocks tend to respond first.”