Wall St. Joins Global Selloff

NEW YORK (CNNMoney.com) -- U.S. stocks added to a worldwide stock selloff Friday on fears of a global recession, but the major indexes bounced off their lows in the first minutes of trading.

The Dow Jones industrial average (INDU) fell 350 points, or 4%, after being down as much as 504 points in the early going.

The Standard & Poor's 500 (SPX) index and the Nasdaq composite (COMP) both lost over 4%. All three major gauges were hovering around five-year 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.

Asian markets tumbled overnight, with the Japanese Nikkei losing almost 10%. The market in Moscow slumped 14% before the exchange suspended trading until Tuesday. European markets slumped in afternoon trading after a big drop in the United Kingdom's third-quarter GDP added to recession fears there.

Bets that the Bank of England and European Central Bank will have to cut rates aggressively in the months ahead sent the euro and pound lower versus the dollar. The dollar slumped versus the yen.

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, after 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.

Results: This week has brought the biggest wave yet of corporate results, with about 140 of the S&P 500 companies having reported.

With 34% of the reports out already, third-quarter profits are currently 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 (MSFT, Fortune 500) 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. (Full story)

Stocks have tumbled over the last year as the financial market meltdown and economic contraction have weighed on equities. Since hitting an all-time high of 14,164 just over a year ago, the Dow has lost about 38%. Since hitting an all-time high of 1,565 at the same time, the S&P 500 has lost around 41%.

Since hitting a bull-market high of 2,859 nearly a year ago, the Nasdaq has crumbled 44%.

Credit market: Lending rates seized up a bit amid the broad recession fears, with Libor, the overnight bank-to-bank lending rate, rising to 1.28% from 1.21% late Thursday, according to Bloomberg.com. However, that still kept the rate below the Fed's benchmark lending rate of 1.5%, which is a good sign for the credit market. Libor hit a record 6.88% earlier this month at the height of the market panic.

The 3-month Libor rate, what banks charge each other to borrow for three months, fell to 3.52% from 3.54% Thursday.

The TED spread, which is the difference between what banks pay to borrow from each other for three months and what the Treasury pays, widened modestly to 2.56% from 2.55% late Wednesday. The spread hit a record 4.65% earlier this month. The narrower the spread, the more willing banks are to lend to each other. To top of page