NEW YORK (AP) – Wall Street managed to stabilize itself in early trading Monday although investors remained nervous about nagging mortgage default concerns and tumbling stock markets abroad.

The major indexes fluctuated in a narrow range as investors tried to size up where the market was headed.

Concerns about losses over soured subprime loans – loans to customers with poor credit ratings – were one of the many factors behind Wall Street’s selloff last week. Those worries were rekindled Monday when HSBC Holdings PLC, Europe’s largest bank, said its 2006 earnings rose 5 percent but that it suffered $10.6 billion on losses on bad loans from its U.S. subprime mortgage operations.

Meanwhile, a rising yen added to concerns about an an erosion in the yen carry trade, which refers to the process of borrowing yen to acquire assets with greater yields in other currencies. A slowdown could hurt liquidity worldwide. By Monday morning, the U.S. dollar fell to about 115.9 yen, up from its earlier lows but still well below its level less than a week ago above 120 yen.

The Institute for Supply Management’s index on the services sector gave investors little to cheer about, after registering at 54.3, lower than analysts’ expected reading of 57.5 and January’s reading of 59.0.

Still, investors appeared to have been somewhat consoled by comments attributed to U.S. Treasury Secretary Henry Paulson by Japan’s finance minister, Koji Omi. Neither Omi nor Paulson, who began a three-nation Asian tour in Tokyo on Monday, were concerned by the fluctuations in regional stock markets, Omi told reporters in Tokyo. Both men contend the market mechanism was functioning well, Omi said.

In the first hour of trading, the Dow Jones industrial average was down 3.37, or 0.03 percent, at 12,110.73.

Broader stock indicators also fell. The Standard & Poor’s 500 index was off 4.92, or 0.35 percent, at 1,382.25, and the Nasdaq composite index fell 6.36, or 0.27 percent, to 2,361.64.

Bonds were little changed, with the yield on the benchmark 10-year Treasury note at 4.50 percent, the same as late Friday. The dollar was higher against other major currencies except for the yen, while gold prices slipped.

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