US shares turned lower in late morning trade Thursday as early gains faded and investors remained worried about frozen credit markets and troubled banks worldwide.
  
The Dow Jones Industrial Average reversed course after a strong open and fell 142.57 points (1.54 percent) to 9,115.53 at 1502 GMT after six days of steep losses.
  
The Nasdaq fell 8.52 points (0.49 percent) to 1,731.81 and the broad Standard & Poor's 500 index lost 17.13 10.63 points (1.74 percent) to 967.81.
  
Analysts said the market was being driven by fear and panic amid a global banking crisis that showed little signs of easing.
  
"The stock market has now moved into very deeply oversold territory.  Virtually every technical indicator we follow is strongly signaling an oversold market ripe for a rebound," said Fred Dickson at DA Davidson & Co.
  
"That said, we need to see something positive happen in the credit markets for buyers to step in and sellers to stand aside. At some point, we expect the tidal wave of hedge fund-related selling to subside, although theoretically it could continue for several more weeks."
  
Chris Lafakis at Economy.com said sentiment remained fragile.
  
"The credit markets are still broken," he said.
  
"Wednesday's concerted interest rate cuts by policymakers in the US and around the globe have failed to ease banks' concerns about one another's solvency."
  
Investors mulled news that US authorities were eyeing the possibility of direct capital injections to troubled banks as a means of shoring up a fragile system.
  
Such a move, already announced by British authorities, would give the government special shares of the banks in exchange for helping boost badly needed capital in an effort to unclog credit markets, analysts said.
  
John Ryding at RDQ Economics said such a move would help stabilize the banking system and go a long way toward easing the crisis.
  
"If Treasury Secretary Henry Paulson follows (British officials') advice, we could finally have found our wider firebreak," he said.
  
Financial shares remained in focus. JPMorgan Chase rebounded 4.05 percent to 40.89 dollars but Bank of America fell 3.4 percent to 21.35 dollars.
  
Wachovia slid 17.5 percent to 4.17 dollars a day after the two suitors for the troubled bank agreed to extend negotiations. Citigroup lost 2.2 percent to 14.07 dollars and Wells Fargo tumbled 10.8 percent to 28.45.
  
Bonds fell. The yield on the 10-year US Treasury bond rose to 3.764 percent from 3.715 percent Wednesday and that on the 30-year bond increased to 4.091 percent against 4.063 percent. Bond yields and prices move in opposite directions.