NEW YORK—Wall Street stumbled through another volatile session but ended with a respectable gain Thursday after a multibillion dollar deal between Dow Chemical and rival Rohm and Haas helped offset concerns about the financial sector and energy costs.

Shares of mortgage finance companies Fannie Mae and Freddie Mac skidded lower on worries they will be forced to sell more new shares than anticipated to compensate for losses from the housing slump. Several retail banks and investment banks also dropped, particularly Lehman Brothers Holdings Inc.

Meanwhile, crude oil price...