U.S. Stocks At Day's Lows After Global Markets Plunge
NEW YORK (MarketWatch) -- U.S. stocks were sharply down but off the day's lows in afternoon trade Friday, and headed for weekly losses, with a sell-off in energy shares fronting broad-sector declines as fears of worldwide recession led to a plunge in global equities.
"I opened my trading platform this morning and thought I must be at a funeral," said Charles Perry, president of Perry Management, an energy-consulting firm. "But the market seems to be firming now."
The Dow Jones Industrial Average recently traded down 352 points, or 4.2%, at 8,338, well off an earlier high of 8,683, and after falling more than 500 points to a low of 8,187.
The blue-chip average still remains far off an intraday low of 7,773 hit in panic selling on Oct. 10. But it remains on track for a weekly drop of 5.8%.
All of the blue-chip index's 30 components posted declines, with Microsoft Corp. losing morning gains, recently down 2.5% following its report of a small profit gain for the September quarter. .
General Motors Corp. fell the most, down nearly 16%.
The Dow's decline, while steep under normal circumstances, proved far less severe than some had feared after stock futures plummeted to their daily limits in preopen trades.
So-called circuit-breakers would have kicked in, had the Dow industrials fallen 1,100 points before 2 p.m. Eastern time, freezing trading for an hour. A 2,200-point plunge before 1 p.m. would have stopped trading for two hours, and a 3,350-point drop would have shuttered trades for the rest of the day.
The S&P 500 Index dropped 39 points, or 4.2%, to 869, a level that leaves it 7.6% below last Friday's close.
Energy, utilities and telecommunication services fronted sector declines that stretched to include all 10 of the S&P's industry groups, with information technology the best-performing sector among them.
Among noteworthy laggards, Transocean Inc. , a provider of offshore-drilling services, fell 10.7%.
Oil futures fell $3.69 to $64.14 a barrel as OPEC cut production by 1.5 million barrels of oil a day.
In the financial sector, PNC Financial Services Group said it would pay about $5.5 billion for troubled regional bank National City Corp. to create what would be the fifth-largest bank when ranked by deposits.
"The mere announcement of a bank merger is hardly significant news these days. It's not even too remarkable that the acquisition price was some 19% less than yesterday's closing price, making it less a takeover than a take-under," said Kevin Giddis, managing director for fixed income at Morgan Keegan & Co.
Shares of PNC gained 0.5%, while National City fell 28.0%. .
The Nasdaq Composite Index fell 62 points, or 4%, to 1,541, readying the technology-laden index for a weekly loss of 11%.
Volume on the New York Stock Exchange neared 962 million, and declining stocks overtook those advancing about 7 to 1. On the Nasdaq, 781 million shares traded, with decliners battering advancers 4 to 1.
Offering some hope that the housing market may be at or near a bottom, the National Association of Realtors reported sales of existing U.S. homes in September tallied its biggest monthly jump in five years. .
"It's hard to put too much in a single number, but if we start to see any more evidence of improvement in the housing market I might just have to become an optimist again," added Giddis.
The dollar fell to a more than 13-year low against the Japanese yen. .
Gold futures reversed course after three days of losses, with the precious metal closing up 2.2% at $730.30 an ounce. .
By Kate Gibson