NEW YORK (AP) — The stock market made a late-day comeback, hoping that homeowners will get more help with their mortgages.

A Reuters report that the government plans to subsidise troubled homeowners' mortgage payments helped the Dow Jones industrial average pare sharp losses yesterday afternoon and finish down less than seven points. Two people briefed on the plan told The Associated Press it would lower mortgage rates for borrowers on the verge of foreclosure. They spoke on condition of anonymity because the details were not yet complete.

The idea of targeted help for homeowners impressed investors more than the government's $789 billion economic stimulus package and its revised plan to bail out problem banks.

"It's one little piece of the puzzle that clears up some of the uncertainty," said Joe Keetle, senior wealth manager at Dawson Wealth Management.

This week has been a turbulent one for stocks, which rallied last week in anticipation of the stimulus package and the financial bailout plan. That rally was erased on Tuesday after Treasury Secretary Timothy Geithner said the government will boost lending, determine which banks should get extra funding, and remove toxic assets from banks' books — but he provided few details about how the plans would work.

And, indeed, many questions remain — particularly about how the government plans to remove the complex, souring assets sitting on banks' balance sheets. No one knows how big the losses are going to be for banks, investors and taxpayers — an uncertainty that has been weighing on stocks for months, especially in the financial sector.

"The market is saying, we will give you the capital when we know you've told us the truth about the garbage," said David Darst, chief investment strategist of Morgan Stanley's Global Wealth Management Group.

But the idea of a plan focused on the crux of the economy's problems — the housing market — came as at least a temporary relief to investors. If more homeowners are able to pay their mortgages, it would not only help the economy, but also keep mortgage-backed assets from losing more value.

The Dow Jones industrial average slipped 6.77, or 0.09 percent, to 7,932.76, after falling by more than 245 points in earlier trading. The blue-chip index got within 142 points of its November 20 close of 7,552.29, which was a five-and-a-half year low. "This is a massive reversal," said Craig Peckham, analyst at Jefferies & Co.

Broader stock indicators ended higher. The Standard & Poor's 500 index rose 1.45, or 0.17 percent, to 835.19, and the Nasdaq composite index rose 11.21, or 0.73 percent, to 1,541.71.

Peckham said stocks also got a lift from a report that a House committee might approve the temporary suspension of credit default swap trading. Credit default swaps are essentially insurance policies for bond defaults; problems in that market have led to massive losses for financial services companies — most notably, the insurer American International Group Inc.

Declining issues outnumbered advancers by about eight to seven on the New York Stock Exchange, where consolidated volume came to 5.65 billion shares, compared with 5.14 billion on Wednesday.

The biggest gainer in the Dow was Coca-Cola, which posted an 18 percent drop in fourth-quarter earnings but topped Wall Street's forecast in terms of adjusted earnings. The soft drink maker also said its case volume grew. Coca-Cola shares rose $3.12, or 7.6 percent, to $44.39.

Another bright spot for the stock market was a new low for the year in oil prices. Light, sweet crude for March delivery sank $1.96, more than five percent, to settle at $33.98 a barrel on the New York Mercantile Exchange.

Government bond prices were mostly lower. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.79 percent from 2.76 percent late on Wednesday. The yield on the three-month T-bill fell to 0.28 percent from 0.29 percent.

The dollar rose against other major currencies, and gold prices also climbed.