Brief rally fades after U.S. stocks plunge at open

— -- A brief rally in U.S. stocks faded as fast as it appeared Friday, with major indexes heading lower again.

Stocks opened sharply lower, then turned on a dime, briefly erasing their losses, as traders at the New York Stock Exchange cheered. But the joy didn't last long.

The Dow Jones industrial average, already down 2,271 points in seven sessions, fell almost 700 points Friday before buying sent the index briefly into positive territory as traders at the New York Stock exchange cheered.

But the joy didn't last long. The major indexes fluctuated sharply as computer-driven "buy" orders kicked in, but investors sold heavily as markets around the world panicked because credit markets remain mostly frozen, still posing a threat to the global economy.

The selling had taken the Dow below the 8,000 level and the Standard & Poor's 500 index below 900.

Following the Dow's modest retracement, the FTSE was trading 282.94 points, or 6.6%, lower at 4,030.86 in afternoon trading London time, while the DAX was down 401.92 points, or 8.2%, at 4,485.08. France's CAC-40 was 284.43 points, or 8.3%, lower at 3,158.27.

Trading on exchanges in Austria, Iceland, Romania and Ukraine was halted when losses mounted quickly. Russian regulators ordered Moscow exchanges, where trading has been suspended for two days, not to open as scheduled.

Frozen credit markets and a loss of confidence in the world's financial system have caused the Dow Jones industrials to drop 21% in just 10 trading days. The blue chip index plunged 678 points Thursday, and is heading to its worst weekly point drop, and one of its biggest weekly percentage drops, since being created 112 years ago.

Going into Friday's session, losses for the year add up to a staggering $8.3 trillion, according to preliminary figures measured by the Dow Jones Wilshire 5000 Composite Index, which tracks 5,000 U.S.-based companies representing almost all stocks traded in the U.S.

President Bush is scheduled to make a statement Friday morning about the financial turmoil. But, words are unlikely to stave off another brutal day, with futures pointing to another volatile session.