Wall Streets stocks staged another broad retreat Friday, but traders and analysts said fears of an even bigger sell-off failed to materialize amid a rare bit of hopeful news about the U.S. housing market and falling prices for oil and other commodities.
The Dow Jones Industrial Average of 30 top stocks marked the 79th anniversary of 1929's "Black Thursday" with a loss of 312.3 points (3.6 percent) to 8,378.95, while the broader Standard & Poor's index of 500 stocks slid 31.35 points (3.5 percent) to 876.76, recovering from a nearly 6 percent drop earlier in the day.
But the losses on Wall Street were below what future markets had predicted following a much sharper decline in Asian and European markets earlier in the day.
The economic omens had been so bad that the New York Stock Exchange was forced to deny rumors the opening bell would be delayed and also said it was prepared to employed its so-called "circuit-breakers" -- temporarily suspending trading if the Dow lost more than 1,100 points -- with "fervent hope we won't need them."
"It's a pathetic moral victory, but the fact that we're not down 1,000 points is telling me the market's sensing value," John Lynch, a market analyst for North Carolina-based Evergreen Investments, told Bloomberg News.
The news, for once, wasn't all bad.
The National Association of Realtors Friday said that sales of existing homes in the United States were up 5.5 percent in September, the biggest monthly increase in five years and a sign that a bottom may have be in sight for the battered U.S. housing market. But median sales prices continued to fall to $191,600, down 9 percent from a year ago.
Oil and other commodity prices were down sharply again yesterday. Oil fell nearly $5 a barrel in early trading on the New York Mercantile Exchange to $63 a barrel, despite the announcement by the OPEC producers cartel that they would cut production quotas by 1.5 million barrels a day next month. The price of a barrel of oil has fallen by more than half since mid-summer.
Global markets had already put a quick halt to Thursday's modest stock rally before trading in the United Stats even began.
Japan's Nikkei index lost 9.6 percent, hurt in part by the news that auto giant Toyota suffered its first quarterly drop in sales in seven years. Britain's FTSE 100 Index fell 6.9 percent as the government announced an 0.5 percent drop in GDP for the third quarter of 2008 -- the first fall in growth in 16 years.
The bleak British growth numbers pushed the pound below $1.53, the biggest drop in 37 years.
Exchanges in Germany and France suffered comparable losses, while Moscow's battered exchange fell another 14 percent as authorities announced a trading halt through Tuesday. The MSCI index of 25 emerging markets also was off more than 8 percent.
White House spokeswoman Dana Perino hailed the new housing data.
"We're not out of the woods yet by any means," she said, "when it comes to falling house prices and our fundamental problem of an oversupply of houses. But we're getting nearer to the bottom every day."
The White House criticized the OPEC production cuts, but analysts said the move may not be enough to reverse the recent sharp drop in energy prices.
Slumping industrial production and consumer demand around the world are frustrating the hopes of oil and other commodity sellers to keep prices high. Futures for oil, gold, copper, lead, palm oil and a broad range of foodstuffs were all sharply down.
But the bad omens continued to outweigh the good, as markets struggled to avoid even larger sell-offs in the days to come.
U.S. automaker Chrysler said it will cut up to 5,000 administrative and temporary jobs by the end of the year through employee buyouts. "It's likely that every facility Chrysler has around the world will be affected by these reductions," company spokesman David Elshoff said.
Automakers like Toyota, Chrysler and General Motors have been hit particularly hard by the global credit crunch, which has fed fears of a deep recession and left even willing customers unable to get car loans.
In another ominous sign, the key global measure of credit was up Friday for the second straight day after nearly two weeks of decline. Massive bank bailouts plans in the United States, Europe and Asia have focused on trying to push down the London interbank interest rate -- the rate banks charge each other for short-terms loans.
The spread on the inter-bank rate widened eight basis points to 262 basis points, according to the British Bankers Association.
The yields on three-month Treasury bills dropped to 0.86 percent, a sign that investors were seeking the safety of the government notes. The yield on the 30-year Treasury note fell to its lowest level in 30 years before rebounding late in the day.
Treasury Department officials said that the Bush administration may be making a second round of capital investments in about 20 more U.S. banks under a $250 billion plan to spur new lending as early as this weekend. Officials announced the first infusion of $125 billion to buy preferred stock in nine of the country's largest banks last week.
In another negative milestone, Iceland Friday became the first Western European country to seek a support package from the International Monetary Fund, saying it is seeking $2 billion to stabilize the country's battered finances. The Iceland government was forced to take control of the country's three largest banks because of rising credit and asset problems.