Dow falls after 300-point swing, Nasdaq off 1.5%

An early stock rally faded Wednesday, with Wall Street failing to halt a two-day slide as the Dow finished near the bottom of a huge, 300-point swing.

The Dow Jones industrial average fell 75 points, or 0.4%. The Dow was doing fine in the first half of the day, gaining as much as 200 points before sinking fast in the afternoon to as much as a 100-point decline. The Standard & Poor's 500 index finished 0.8% lower and the tech-heavy Nasdaq composite index slid 1.5%.

Oil prices remained volatile in Wednesday trading as financial markets have come under pressure this week on oversupply concerns after OPEC countries decided to maintain current production levels. Oil prices recouped some losses early Wednesday after the government reported that crude supplies fell for the first time in 11 weeks, dropping 3.6 million barrels last week.

But those gains were short-lived as U.S. benchmark crude reversed course and fell 0.9% to $37.16 a barrel after initially spiking as high as $38.99 after the inventory news.

In corporate news:

• Yahoo confirmed that it was scrapping plans to spin off Alibaba and instead will spin off core business. Yahoo (YHOO) shares fell 1.3% and Alibaba (BABA) lost 1.1%.

Yahoo to spin off core business into new company

• Shares of Dow Chemical (DOW) soared more than 11.9% and DuPont (DD) also jumped 11.9% on reports that the two chemical companies were in advanced talks to merge.

Global markets were lower. European shares dropped as Germany’s DAX index lost 0.8%, France’s CAC 40 was 1% lower and Britain’s FTSE 100 was down 0.1%.

Japan’s Nikkei 225 index lost 1% while Hong Kong’s Hang Seng index dropped 0.5%. The Shanghai composite index gained 0.1%.

Stocks fell Tuesday as the Dow closed down 163 points and the S&P 500 dropped 13.

From USA TODAY's Investment Roundtable:

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Contributing: Associated Press

Jane Onyanga-Omara on Twitter: @janeomara.