U.S. stocks were mixed Friday morning after a week of brutal selling pushed them to new yearly lows.
Shares opened slightly lower, but turned positive in the first half-hour of trading. Later they bounced between small gains and losses.
Major indexes were down more than 7 percent for the week after recession fears and concerns about Europe’s debt crisis led traders to abandon riskier investments.
At 10:18 a.m. Eastern time, the Dow Jones industrial average fell 62 points, or 0.6 percent, to 10,672. The Standard & Poor’s 500 index lost 2, or 0.2 percent, to 1,127. The Nasdaq composite index fell a fraction to 2,455.
The Dow has fallen more than 15 percent since its recent peak on July 21. It was nearly 50 points below its 2011 closing low, reached on Aug. 10.
Markets in Asia closed sharply lower. European markets erased big losses after U.S. markets opened without a steep dive.
U.S. markets have fallen for four straight sessions, driving the Standard & Poor’s 500 index down 7 percent this week.
Treasury yields remain near record lows as traders amass lower-risk bets. Demand for Treasurys drives their prices higher and their yields lower.
Finance ministers from 20 leading economies pledged late Thursday to take “all necessary actions to preserve the stability of the banking systems and financial markets” and make sure banks have the cash they need to stay afloat.
The announcement offered no new specifics, and did little to stem the selling. But European markets started rising before U.S. markets opened, and were down less than a percent. London’s FTSE 100 lost 0.2 percent, Germany’s Dax fell 0.6 percent and France’s CAC 40 dropped 0.4 percent.
The Dow Jones industrial average has dropped 7 percent this week, its worst showing since the week ended Oct. 3, 2008. That’s the week Congress struggled to pass the $700 billion bank bailout known as the Troubled Asset Relief Program.
Fears about Europe’s debt crisis were stoked early Friday by news that Moody’s Investors Service had downgraded eight Greek banks by two notches. The rating agency said the banks hold too much Greek debt. It said Greece’s economic situation is worsening as government attempts to slash spending provoke violent protests.
The agency said the outlook for the banks’ long-term deposit and debt ratings was negative.
Greece appears increasingly likely to default on its debts. European officials have begun to speak openly of the possibility, and the fears have roiled international markets.
Greece will run out of money in the coming weeks if it fails to convince lenders it is meeting cost-cutting goals and deserves another round of bailout money.
A default by Greece would hurt banks in Greece, France and Germany that hold billions in Greek debt. Their holdings would lose value quickly, eroding the financial cushions banks keep to absorb unexpected losses.
A Greek default would also increase investors’ concerns about defaults by other financially-troubled nations, such as Ireland, Portugal, Italy and Spain. If investors dumped bonds issued by those governments, their borrowing costs would spike. Investors fear a cascade of defaults akin to the global credit freeze after the 2008 bankruptcy of investment bank Lehman Brothers.
Europe’s economy is barely growing. A financial shock could tip Europe into recession, and would increase chances for a U.S. recession.
Some companies that produce commodities lost value. Range Resources Corp. lost 6.4 percent. Newmont Mining Corp. fell 3.8 percent. Oil contractor Baker Hughes Inc. gave up 2.8 percent.
Products such as silver, fossil fuels and industrial metals would lose value if economic growth slowed.
The commodity sell-off continued on Friday. Benchmark crude oil prices fell 1 percent, gold dropped 2.6 percent and silver fell 8.7 percent.
Traders had sold precious metals to raise cash during Thursday’s plunge and dumped other investments that are more valuable in a growing economy, such as oil and raw materials.
Stocks had plunged Thursday, marking their second day of steep losses since the Federal Reserve announced a new effort to boost the economy by buying long-term Treasurys. By creating extra demand for the investments, the Fed hopes to drive their yields lower. Many interest rates are based on the yield for the 10-year Treasury note. Lower interest rates might spur investment and increase lending.
The Dow Jones industrial average lost 391 points and at one point was down more than 500, a return to the volatility that gripped the market this summer. Nineteen stocks on the New York Stock Exchange fell for every one that rose.
The Dow almost matched its lowest close of the year. The stock market was seized by volatility last month, and at one point the Dow strung together four consecutive days of 400-point moves up or down.
It would have to fall 485 more points to reach the traditional definition of a bear market — a 20 percent decline. The Dow was at 12,810 on April 29.