Stock prices swung sharply on Wall Street, with investors still selling heavily but also scooping up stocks that have been decimated by more than a week of huge losses. The Dow Jones industrials, down nearly 700 points in the opening minutes of trading, recovered to an advance of more than 100 before turning lower again, and the other major indexes fluctuated sharply as well.
Frozen credit markets and a loss of confidence in the world's financial system have caused the Dow to drop 21 percent in just 10 trading days. The blue chip index tumbled 678 points Thursday, and is heading to its worst weekly point drop, and one of its biggest weekly percentage drops, since being created 112 years ago.
Friday's gyrations were likely caused by the computer-driven "buy" orders that kicked in when prices fell far enough to make some stocks _ including the pummeled financial stocks _ look like attractive bets. But that buying didn't necessarily reflect an easing of the market's deep despair, and so the selling continued.
"Momentum is running against the market and you don't want to get hit by a train," said Jack Ablin, chief investment officer at Harris Private Bank. "This is now about market psychology. There's extreme fear and panic out there."
At the start of Friday's session, losses for the year totaled a staggering $8.3 trillion, as measured by the Dow Jones Wilshire 5000 Composite Index, which tracks 5,000 U.S.-based companies representing almost all stocks traded in the U.S.
A stream of selling forced exchanges in Austria, Russia and Indonesia to suspend trading, and those that remained opened were hammered. The rout in Australian markets caused traders there to call it "Black Friday."
European stocks sank, with Britain's FTSE-100 down 8.09 percent, German's DAX down 9.4 percent, and France's CAC-40 down 9.7 percent. In Asia, the collapse of Japan's Yamato Life Insurance caused already nervous investors to pull even more money out of the market _ the Nikkei 225 fell 9.6 percent.
In midmorning trading, the Dow fell 197.61, or 2.30 percent, to 8,381.58.
Broader stock indicators also fell. The Standard & Poor's 500 index was off 22.63, or 2.49 percent, at 887.29, while the Nasdaq composite index rose 29.92, or 1.82 percent, 1,615.20.
Declining issues outnumbered advancers by about 3 to 1 on the New York Stock Exchange, where volume came to 599.1 million shares.
Investors continue to shift money into safer investments, most of it going into the government bond market. The yield on the three-month Treasury bill plunged to 0.40 percent from 0.58 percent late Thursday. That suggests that demand for T-bills, regarded by investors as the safest assets around, remains high.
Longer-term Treasury yields moved higher as investors moved into shorter term issues. The yield on the benchmark 10-year note rose to 3.88 percent from 3.76 percent late Thursday.
Central banks around the world were forced to cut interest rates this week after continuing problems in the credit market triggered concerns that banks will run out of money. Analysts have described the mood on trading floors as panicked, with investors bailing out of stocks on fears there is no end in sight to the financial carnage.
Gold prices climbed $10.60 to $897.10 an ounce on the New York Mercantile Exchange, while oil prices fell. A barrel of light, sweet crude declined $3.60 to $82.99 a barrel on the Nymex.
Finance ministers and central bankers from the Group of Seven nations will meet Friday to discuss the economic meltdown. One of the potential remedies expected to be discussed at the meeting in Washington is for governments to guarantee lending between banks.
Among financial stocks, big national banks were among the gainers, including Bank of America Corp., up $2.26 at $21.89, but smaller banks also were up, including Comerica Inc., rising $2.68 to $25.40.
In corporate news, General Electric Co., a bellwether for the U.S. economy, reported that third-quarter profit sank 22 percent. The Dow component blamed the drop on more losses in its financing business, though earnings for the company met Wall Street projections. GE rose $1.09, or 5.7 percent, to $20.10.
Citigroup Inc. said late Thursday it was suspending its bid to acquire Wachovia Corp., which will be acquired by Wells Fargo & Co. Citigroup rose $1.53, or 12 percent, to $14.46, while Wells Fargo jumped $2.14, or 7.9 percent, to $29.39. Wachovia surged $1.42, or 39 percent, to $5.02.
Wall Street also digested fresh economic data. The U.S. trade deficit edged down slightly in August, reflecting a drop in foreign oil from record levels. But the politically sensitive deficit with China increased as imports from that country hit an all-time high.
The Russell 2000 index of smaller companies fell 5.07, or 1.02 percent, to 494.13.
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