New York City ? A still skittish Wall Street closed modestly lower Thursday, having clawed its way back from an early-session plunge after upbeat manufacturing data allayed fears about a flagging U.S. economy.

The Dow Jones industrials ended 34 points lower after tumbling 209 points in early trading and briefly reaching positive territory in the afternoon.

Investors, relieved that manufacturing is still expanding, bought some of the stocks pummeled in Tuesday’s drop, which sliced 416 points off the Dow. The blue chip index is now down 398 points, or 3.2 percent, from its closing level Monday, having rebounded halfheartedly Wednesday on calming words about the economy from Fed Chairman Ben Bernanke.

The Institute for Supply Management’s index of February manufacturing activity came in at 52.3, stronger than the 50 reading analysts expected.