Stocks pulled back sharply today, erasing most of the previous session’s big gains as investors grew concerned about high commodities prices and the possibility that banks remain vulnerable to further problems from soured debt.

The Dow Jones industrial average fell nearly 300 points after rising 420 on Tuesday.

Talk swirled about whether further write-downs are in the offing after Merrill Lynch & Co. filed a lawsuit against a company involved in a debt transaction with the company, according to several reports. Merrill was among the steepest decliners of the financial stocks.

News that the government plans to free up billions of dollars at Fannie Mae and Freddie Mac, a move that could help struggling homeowners, for a time helped quell some of the market’s fears.

But it couldn’t stave off selling late in the session by investors who have seen big advances evaporate many times during the course of the credit markets crisis and decided to preserve some of their gains.

According to preliminary calculations, the Dow on Wednesday fell 293.00, or 2.36 percent, to 12,099.66.

—The Associated Press

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