U.S. stocks went on another wild ride Friday, ending the week tumultuously once more amid growing worries about an economic slowdown in the U.S. and Europe.
The Dow Jones industrial average fell sharply at the open, recovered to the plus side, then slipped through most of the day, falling about 173 points, or 1.6 percent, to 10,818 at the close. The S&P 500 dropped 1.5 percent to 1,124.
After Morgan Stanley cut its estimates for world economic growth on Thursday, Citigroup weighed in the next day, reducing its estimate for U.S. gross domestic product growth to 1.6 percent this year from 1.7 percent, and slashed its forecast for 2012 to 2.1 percent from 2.7 percent.
"This week has seen a continuation of the trend of weaker than expected data and political reaction to the European problems which pretty much amounts to 'Let's have a get together a couple of times a year,' " Gary Jenkins, an analyst at Evolution Securities, told the Associated Press.
Weighing heavily on the Dow 30 was Hewlett-Packard, which announced it will get out of making tablet computers and smart phones and look to shed its low-margin PC business. The shares fell 20 percent, their biggest decline in at least 30 years.
In Europe, the major indexes were off 3 percent to 4 percent at mid-day, but recovered much of that ground at the close.
Gold hit another new record of $1,877 an ounce after reaching $1,858 on Thursday.
Market turmoil of the last two days has dashed any hopes of a quiet second half of August — a normally quiet period when trading dries up until the U.S. returns from the Labor Day holiday in early September.
Financial markets have wrestled for several weeks with fears that a new recession in the U.S. is in the offing. Another round of soft economic data further spooked investors all round the world. A woeful manufacturing survey Thursday from the Federal Reserve Bank of Philadelphia renewed U.S. recession fears in particular.
The Dow Jones industrial average closed 424.7 points lower to 10,985.50 on Thursday. In Europe, the major indexes at closing had fallen sharply, with London's FTSE off 4.5 percent and the German DAX down 5.8 percent.
Back in the U.S. on Thursday, the Labor Department reported 408,000 initial unemployment claims were filed in the week that ended Aug. 13, up 9,000 from a revised 399,000 from the previous week.
Doug Roberts, chief investment strategist of ChannelCapitalResearch.com, said that because the weekly claim figure is now above the key 400,000 level, it damages investors' confidence in the economic recovery. Adding to the concerns are federal spending cuts, which seem to rule out further fiscal stimulus.
The Federal Reserve of Philadelphia reported a decrease in factory activity in August. Roberts said all eyes will be on the Federal Reserve annual global central banking conference later this month in Jackson Hole, Wyo., for signs of any monetary stimulus.
The Consumer Price Index rose 0.5 percent in July, more than twice the expected 0.2 percent, leading to some fears of "stagflation," a combination of price inflation and stagnation in the economy.