Shares of Morgan Stanley returned to positive territory while Goldman Sachs Group Inc. pared some of its earlier losses in a volatile trading session, a day after the Dow Jones Industrial Average sunk to its lowest level in more than two years amid a big selloff in financials.

The reversals came as Dow Jones Industrial Average closed up 410 points, as efforts to reassure investors from Morgan Stanley, the Securities and Exchange Commission and central banks worldwide finally bore some fruit. Also helping the turnaround, CNBC reported that U.S. Treasury Secretary Hank Paulson is considering forming a new state body to specifically address the credit crisis.

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