The Dow held above 8,000, but that was just about the only positive Friday on Wall Street, where stocks extended the steepest drop since 1990.
Several attempted rebounds from Thursday's 357-point plunge unraveled as soon as they began, with the Dow Jones industrial average falling another 114.31 points to 8,051.68 by Friday's close.The Dow, which has fallen 550 points in just three sessions, is now 1,268 points, or 13.8 percent, below the July 17 record of 9,337.97. That's the steepest drop since a 21.2 percent slide triggered by the Persian Gulf crisis in the summer and fall of 1990.
Just before noon, the Dow nearly traded below 8,000 for the first time since late January, sliding 154 points to 8,011. Even with the small recovery, however, the Dow has seen this year's gain shrink from 18.1 percent to just 1.8 percent.
The market's decline has been fueled by worries about how much and how long company profits will suffer with the Asian fiscal crisis stretching into a second year. Fears that the new crisis in Russia could threaten to slow the European economy or even spread to Latin America have also weighed on the market.
"Psychologically, a close below 8,000 would be a negative," said Bob Dickey, managing director of technical analysis at Dain Rauscher Wessels in Minneapolis, asserting that the market's summer slide is nearing a bottom.
"What's bothered me has been how weak the market's been near the close the last few days," said Dickey. "Investors don't want to be at risk overnight and especially over a weekend. If we do get more bad news, it could set us up for (more selling) on Monday morning."
Trading was heavy again, although slower than on Thursday, when more than 2 billion shares were traded for only the second time in U.S. stock market history.
Individual investors who were rattled by Thursday's decline were demonstrating some renewed confidence on Friday, according to some leading mutual fund companies.
At Dreyfus and Janus, investors moved some money from equity funds on Thursday. By Friday, many were moving their holdings back to stock funds, the companies said.
Friday's selling was hardly as ferocious as on Thursday, when the Dow fell 4.2 percent or 357.36 points, the third-biggest point drop ever behind the 554.26-point plunge last Oct. 27 and the 508-point crash 10 years earlier on Oct. 19, 1987.
In Tokyo, the main stock index dove to a 12-year low, and Hong Kong's key index fell 1.2 percent.
The Dow's renewed retreat cut short a midafternoon recovery bid in Europe. Exchanges in London, Paris and Frankfurt all finished lower, although the damage was not nearly as bad as it had been in the morning, when key indexes were off by about 5 percent.
Among the hardest hit during U.S. trading were technology stocks, which have considerable exposure to the various fiscal crises overseas.
The technology-heavy Nasdaq composite index fell 46.73 to 1,639.68, while the Standard & Poor's 500 fell 15.34 to 1,027.25.
Declining issues outnumbered advancers by nearly a 2-to-1 margin on the New York Stock Exchange.