U.S. stocks slumped on Friday morning, joining the worldwide selloff on fears of a global recession, yet the major gauges managed to fight back from morning lows.
Stocks have been mostly lower this week as the credit crisis, sluggish corporate forecasts and slump in commodity prices exacerbated fears of a steeper slowdown. The weakness hasn't been limited to U.S. stocks, with markets in Asia and Europe tumbling this week as well.
Oil prices continued to slide, with crude dropping below $65 a barrel despite news that oil cartel OPEC is cutting production by 1.5 million barrels a day starting in November.
Investors had been braced for an even bigger selloff in the early going. Dow Jones industrial average futures fell 548 points, which triggered trading limits.
That prompted the New York Stock Exchange to post a statement on its blog confirming that trading would began as normal at 9:30 a.m. ET, saying it felt it needed to address widespread rumors that the open would be delayed.
On a positive note, a report showed sales of existing homes jumped more-than-expected in September, with investors taking advantage of lower prices. The report also showed that prices continue to fall.
U.S. light crude oil for December delivery fell $3.44 to $64.40 a barrel on the New York Mercantile Exchange after ending the previous session at a 16-month low.
Prices have been sliding since crude peaked at a record $147.27 a barrel on July 11. The decline since then has resulted from speculators pulling out of the market on bets that demand is slowing along with the global economy.
COMEX gold for December delivery fell 70 cents to $714 an ounce.
This week has brought the biggest wave yet of third-quarter corporate results. About 140 of the S&P 500 companies have reported.
With 34% of the reports out already, profits are on track to have fallen almost 10.9% from a year earlier, according to the latest estimates from Thomson Reuters.
After the close Thursday, Microsoft reported quarterly sales and earnings that topped forecasts. But the software leader also warned that sales and earnings for the fiscal second quarter and the full year won't meet forecasts due to the slowing economy. Shares fell 3.5%.
In other news, PNC is buying fellow regional bank National City in a $5.6 billion deal. National City's shares have been hammered over the last few months amid questions about its solvency following a series of bank failures and mergers.
Treasury prices rose, lowering the yield on the 10-year note to 3.60% from 3.54% Thursday. Treasury prices and yields move in opposite directions. At one point, the yield on the 30-year bond sank to the lowest point in its 31-year trading history, to as low as 3.87%.