Stocks on Wall Street were higher Thursday, swinging across a wide range as investors weighed a painful report on the nation’s economy against signs that the flow of credit had been restored.

The Dow Jones industrial average was about 150 points higher in midafternoon, down from a 250-point climb in the opening minutes. The Standard & Poor’s 500-stock index was up about 1.9 percent, and it has swung across a nearly 4 percent range over the course of the day.

Investors appeared encouraged by efforts from central banks over the last 24 hours to inject more money into the world’s financial system, offering a buffer for loans and a backstop for the short-term financing market.

The Federal Reserve lowered its benchmark lending rate by half a point on Wednesday, and it introduced arrangements to enable several emerging-market economies to swap their currencies more easily for dollars. The International Monetary Fund also committed hundreds of billions of dollars in loans.

Borrowing rates among banks fell overnight, a sign of easing in the credit market. The benchmark Libor rate for overnight loans fell to an all-time low. Three-month Libor rates also declined sharply.

Buyers also returned to the market for commercial paper, short-term i.o.u.’s used by businesses to finance daily operations. The amount of outstanding commercial paper rose by more than $100 billion for the week that ended Wednesday, rising to $1.55 trillion. That was a major improvement from earlier in the month, when the market shrank. The Fed’s introduction of a program to buy short-term corporate debt directly was considered a direct cause for the improvement.

Investors in the United States were apparently unfazed by a Commerce Department report that showed the worst consumer spending in nearly three decades. Gross domestic product declined at a 0.3 percent annual rate from July to September, the first contraction since 2001.

The report was taken as confirmation that the economy is in recession. But the decline was slightly better than economists had expected. Investors may have been pricing in even darker results.

Stocks on Wall Street have not had two consecutive days with gains in more than a month. A rally on Wednesday fizzled in the final minutes of the session; some outlets attributed the sudden decline to an erroneous report published about General Electric that was later retracted. So far, though, stocks are having an encouraging week, with the Dow up about 690 points since Monday.

Indexes in London and Frankfurt closed slightly more than 1 percent higher after falling back from earlier gains. Paris stocks showed a modest gain.

The Hang Seng index in Hong Kong led an Asian rally, closing up 12.8 percent, and the Kospi index in Seoul also soared 12 percent.

In Tokyo, the Nikkei 225 rose 10 percent, giving it a three-day gain of about 25 percent, on speculation that the Bank of Japan would cut its main interest rate target at its policy meeting on Friday. Prime Minister Taro Aso also was expected to announce an economic stimulus package worth $50 billion.

The S.& P./ASX 200 index in Sydney closed the day 4 percent higher.

Asian stocks were helped by news that the South Korean government had established a $30 billion currency swap line with the Fed, a measure expected to ease pressure on local banks needing to refinance foreign debt.

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By MICHAEL M. GRYNBAUM

Source: New York Times – U.S.A.