Wall Street climbed again Friday, wrapping up its biggest five-day rally in more than 75 years, even as investors digested signs of a bleak holiday season for retailers and fears that a flurry of reports next week will show more economic distress.

On the short trading day, investors snapped up the battered shares of blue-chip stalwarts Citigroup Inc., General Motors Corp. and Ford Motor Co., fueling a rally that has surprised many market experts whipsawed by wild swings during the past three months.

The market got big boosts over the past week from President-elect Barack Obama naming his economic team, the government propping up Citigroup, and the Federal Reserve deciding to buy massive amounts of mortgage-backed securities. These efforts sent mortgage rates plunging, and reassured the market that broad efforts are still being made to fight the financial crisis that intensified in September with the bankruptcy of Lehman Brothers Holdings Inc.

Just last week, the S&P 500 index fell to its lowest point since 1997 while Citigroup and GM were trading at 15-year and 70-year lows, respectively - touching off worries about how far the market would slide.

While the stock market's strong rebound was certainly welcome, analysts were hesitant about getting too optimistic. Not only did were trading volumes very light on Friday, but investors will be digesting a slew of economic data next week ranging from a reading on the manufacturing sector to the all-important employment report from the Labor Department. Both are expected to be dismal.

"We're seeing some confidence come back into this stock market, but I don't think that's necessarily a reason to be dropping our guard," said Scott Fullman, director of derivatives investment strategy for WJB Capital Group in New York. "You still have to be cautious. There's opportunity, but you have to be extremely selective and defensive."

The stock market closed three hours early the day after Thanksgiving and locked in gains of 16.9 percent for the Dow since the rally began Nov. 21, 19.1 percent for the S&P 500; and 16.7 percent for the Nasdaq.

It was the first time the Dow rose for five consecutive sessions since July 2007, and the biggest five-day percentage gain over five sessions since Aug. 8, 1932. For the S&P 500, it was the first five-day string of gains since July 2007, and the largest five-day percentage gain since March 16, 1933.

The month of November wiped out $1 trillion of shareholder wealth, but the last five days gained $1.2 trillion, according to the Dow Jones Wilshire 5000 Composite Index, which reflects the value of nearly all U.S. stocks.

What could stymie the rally, however, is if the holiday shopping period, which began in earnest Friday, turns out even worse than expected. Wall Street already anticipates that retailers will suffer as consumers, nervous about a difficult job market, lower home values and a jittery stock market, grow more restrained in their spending this year.

"You've seen all sorts of numbers that point to the fact that discretionary spending in the economy has come to an absolute halt," said David Reilly, director of portfolio strategy at Rydex Investments.

Some retail stocks rose Friday as some investors hoped the predictions have been overly dour. Macy's Inc. added 5.6 percent, though some discounters, like Wal-Mart Stores Inc., slipped.

A rare drop in year-over-year holiday spending would be troubling, as it is the most important period of the year for most retailers and because consumer purchases account for more than two-thirds of U.S. economic activity. But while some stores around the nation appeared busy Friday as shoppers looked for bargains, the early evidence was anecdotal and Wall Street would have to wait for cash register tallies.

"The discounting appears to be unbelievable," said Reilly. "The retail sector is going to do whatever it can to get people through the door."

On Friday, the Dow rose 102.43, or 1.17 percent, to 8,829.04.

Broader stock indicators also rose. The S&P 500 index advanced 8.56, or 0.96 percent, to 896.24, while the Nasdaq composite index rose 3.47, or 0.23 percent, to 1,535.57 after spending much of the session lower.

The Russell 2000 index of smaller companies rose 4.28, or 0.91 percent, to 473.14.

Government bonds rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, tumbled to 2.92 percent from 2.99 percent late Wednesday. The yield on the three-month T-bill, considered one of the safest investments, edged up to 0.05 percent from 0.03 percent Wednesday.

The average overnight rate on a 30-year fixed mortgage was 5.76 percent Friday, according to Bankrate.com, down from 6.00 percent a week ago. The average overnight rate on a 15-year fixed mortgage was 5.50 percent, down from 5.64 percent.

Citigroup was by far the biggest gainer Friday among the 30 stocks that make up the Dow industrials, rising $1.24, or 17.6 percent, to $8.29. Just a week ago, the bank's stock was selling off precipitously, before the government put together a plan to backstop more than $300 billion of the bank's assets.

Ryan Detrick, senior technical strategist at Schaeffer's Investment Research, noted that the day after Thanksgiving is historically a winning day for the market, and that the recent bounce resembles those seen in October when the market stormed higher on relatively light volume only to retreat in the face of gloomy economic readings. Market advances on light volume can indicate that there are simply fewer sellers rather than a strong number of buyers snapping up stocks with conviction.

"We're looking at this like not much more than a light-volume, bear market bounce," Detrick said. "They go away just as quickly as they happen, unfortunately."

In addition to next week's economic data, investors will be waiting to see if Detroit's major automakers can secure federal loans after sending restructuring plans to Capitol Hill by Tuesday. General Motors Corp. rose 43 cents, or 8.9 percent, to $5.24 Friday, while Ford Motor Co. rose 54 cents, or 25 percent, to $2.69. Chrysler LLC isn't publicly traded.

The dollar mostly rose against other major currencies, while gold prices also advanced.

Light, sweet crude fell a penny to settle at $54.43 per barrel on the New York Mercantile Exchange.

Advancing issues outpaced decliners by more than 2 to 1 on the New York Stock Exchange, where consolidated volume came to 2.63 billion shares, down from 5.71 billion shares on Wednesday.

Overseas, Japan's Nikkei stock average fell 0.23 percent. Stocks in India rose a day after trading was suspended because of the terrorist attacks in Mumbai, the country's financial capital. The Sensex Index ended the day with an advance of 0.7 percent.

Britain's FTSE index rose 1.46 percent, Germany's DAX index rose 0.09 percent, and France's CAC-40 advanced 0.38 percent.

The Dow Jones industrial average ended the week up 782.62, or 9.73 percent, at 8,829.04. The Standard & Poor's 500 index finished up 96.21, or 12.03 percent, at 896.24. The Nasdaq composite index ended the week up 151.22, or 10.92 percent, at 1,384.35.

The Russell 2000 index finished the week up 66.60, or 16.38 percent, at 473.14.

The Dow Jones Wilshire 5000 Composite Index - a free-float weighted index that measures 5,000 U.S. based companies - ended at 8,945.20, up 1,019.14 points, or 12.86 percent, for the week. A year ago, the index was at 15,581.48.

Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed

Optimism that a prolonged global economic downturn will be averted lifted Japanese stocks Thursday, following an aggressive interest rate cut in China and assurances by President-elect Barack Obama for a swift economic rescue plan.

The benchmark Nikkei 225 stock average added 160.17 points, or 2 percent, to 8,373.39 -- its highest level in more than a week. The broader Topix index rose 1.5 percent to 829.03.

A 1.08 percentage point reduction in China's key one-year lending rate announced late Wednesday -- its biggest rate cut since 1997 and the fourth in three months -- helped boost marine transport, steel and machinery issues by alleviating fears of a slump in China's demand for raw materials.

Mitsui O.S.K. Lines Ltd., the world's biggest cargo shipper, jumped 7.4 percent to 478 yen, and construction machinery maker Komatsu Ltd. advanced 4.4 percent to 1,070 yen.

Overnight, U.S. markets reversed losses after Obama pledged he would have an economic plan on his first day in office. After filling more spots on his economic team, Obama declared: "help is on the way." The Dow Jones industrials rose 2.9 percent to 8,726.61.

Securities companies were among the day's biggest winners, with Nomura Holdings Inc. surging 5.3 percent to 680 yen and Daiwa Securities Group Inc. up 6.3 percent at 473 yen.

Still, investors were reluctant to drive stocks much higher amid ongoing concerns about the yen's strength and the latest terrorist attacks in India, said Mitsushige Akino, fund manager at Ichiyoshi Investment Management in Tokyo.

"The U.S. is spending money right now on measures to boost the economy," he said. "If geopolitical risks rise, like terrorism, then it will probably have to spend even more money in response. Then that will only further weaken the dollar."

Japanese exporters in particular have been hit hard this year by the stronger yen, which reduces profits earned abroad and makes their products more expensive in overseas markets.

Shares of Panasonic Corp. declined 4.7 percent to 1,284 yen on speculation that it planned to slash its profit outlook, which it announced after the market closed. Blaming the "rapid appreciation of the yen," the Osaka-based company now expects net profit of 30 billion yen from its previous forecast of 310 billion yen.

The dollar was trading at 95.15 yen from 95.54 late Wednesday. The euro stood at $1.2887 from $1.2889.

Wall Street extended its gains into a fourth session Wednesday, rising moderately after President-elect Obama soothed investors by pledging he would have a plan to deal with the nation's economic crisis on his first day in office.

Stocks that had fallen in early trading on reports of more economic weakness turned higher after Obama stated, "Help is on the way." He spoke as he filled more spots on his economic team.

There was still caution in the market, however, not surprising since Wall Street is coming off three sessions of gains that gave the Dow Jones industrials and the Standard & Poor's 500 index their first triple-session advances in more than two months. Traders were also cautious ahead of what is essentially an extended Thanksgiving holiday weekend; the market is closed Thursday and will have an abbreviated session Friday.

Obama's remarks were calming after the day's economic reports. The Labor Department said initial requests for unemployment benefits fell to a seasonally adjusted 529,000 from the previous week's upwardly revised figure of 543,000. That is lower than analysts' expectations of 537,000. Still, the initial claims remain at recessionary levels.

Meanwhile, the Commerce Department said orders to U.S. factories for big-ticket manufactured goods plunged in October by the largest amount in two years as the economy weakened. The 6.2 percent drop was more than double the 3 percent decline economists expected.

It also reported that sales of new homes fell 5.3 percent in October to the lowest level in nearly 18 years. The seasonally adjusted annual sales pace of 433,000 homes was the lowest level since January 1991, when the country was facing another steep housing downturn.

Americans also cut back on their spending in October by the largest amount since the 2001 terror attacks. The Commerce Department said consumer spending plunged by 1 percent last month, worse than the 0.9 percent decline that had been expected. The report also said personal incomes rose 0.3 percent last month, more than the 0.1 percent gain analysts had predicted.

Analysts said some of the turnaround was also due to the fact that the economic news was expected to be bad.

"What the market might be saying is that investors had been bracing for some of this," said Todd Salamone, director of trading and vice president of research at Schaeffer's Investment Research in Cincinnati, noting that investors have tempered how much spending they expect from consumers. "Expectations have come down, but the big question is if that's rational or not. Certainly the stock market and the credit markets have suggested there might be some rationale in that, but time will tell."

In late morning trading, the Dow industrials rose 35.60, or 0.42 percent, 8,515.07.

Broader indicators also rose. The S&P 500 advanced 3.46, or 0.40 percent, to 860.85, while the Nasdaq rose 30.10, or 2.05 percent, to 1,494.83.

The Russell 2000 index of smaller companies rose 5.30, or 1.20 percent, to 448.48.

Advancing issues outnumbered decliners by 9 to 5 on the New York Stock Exchange, where volume came to 333.1 million shares.

On Tuesday, stocks finished mostly higher as investors were encouraged by new government initiatives to help unfreeze the credit markets. The Treasury Department and the Federal Reserve said they planned to provide $800 billion to aid the market for consumer debt and to make mortgage loans cheaper and more available.

The Dow finished up 36 points, for a gain of more than 900 points across three sessions. The Dow last put a three-day advance together on Aug. 26-28. The S&P 500, meanwhile, had its first three-day rise since Sept. 10-12. Tech stocks lagged and sent the Nasdaq moderately lower as investors feared businesses will further cut back on technology spending.

Still, the market's performance in recent sessions has been a welcome show of stability as stocks have generally traded with less volatility than they had in the past three months as the market's yearlong pullback intensified.

Salamone remains cautious and isn't sure the calm will last.

"I don't think its a sign of longer-term stability, but feel this is a sign of shorter-term stability. There's just too much uncertainty out there," he said.

Bond prices were mixed Wednesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.00 percent from 3.10 percent late Tuesday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.05 percent from 0.09 percent late Tuesday.

The dollar mostly rose against other major currencies, while gold prices fell.

Light, sweet crude rose $1.12 to $51.89 a barrel on the New York Mercantile Exchange.

Some of Wednesday's caution was also likely due to uneasiness ahead of the holiday shopping season. The season, which accounts for as much as 40 percent of annual profits for many stores, is expected to be the weakest in decades, as consumers grapple with rising unemployment and a drop in household wealth.

Some consumer technology names managed to post gains as investors hoped they might be able to see post holiday results.

Apple Inc. rose $3.49, or 3.8 percent, to $94.29, while Dell Inc. rose 49 cents, or 4.7 percent, to $10.91. Sprint rose 22 cents, or 9.4 percent, to $2.55.

Blue chip stocks were mixed. Consumer products maker Procter & Gamble Co. fell 70 cents to $62.48, while Chevron Corp. rose $1.06 to $77.59.

Overseas, Japan's Nikkei stock average fell 1.33 percent. In afternoon trading, Britain's FTSE 100 fell 2.10 percent, Germany's DAX index fell 1.37 percent, and France's CAC-40 fell 2.03 percent.

General Motors Corp. workers will be unable to buy GM shares through two employee savings programs indefinitely because the plans' administrator believes additional investments are not appropriate based on the automaker's financial situation.

GM initially suspended employee purchases of the company's shares within the savings plans on Sept. 30, saying workers had bought all the available registered shares.

GM said in a regulatory filing Tuesday that it had planned to register additional shares with the Securities and Exchange Commission and expected to lift the blackout in the week of Nov. 9. But State Street Bank and Trust Co., which independently oversees GM's employee stock fund, said any more investments by plan participants are not appropriate "due to GM's recent earnings announcement and related information about GM's business."

Earlier this month, GM posted a third-quarter loss of $2.5 billion. The company has said its cash burn has accelerated so rapidly that it may not survive into next year without government help.

That has driven GM's share price as low as $1.70, their lowest price in more than 70 years. Shares of GM fell 23 cents, or 6.4 percent, to $3.36 in afternoon trading Tuesday.

GM notified its directors and executive officers in September that they cannot buy or dispose of any GM equity securities that were acquired in connection with their employment. The Sarbanes-Oxley Act generally prohibits directors and officers from trading in their company's stock when most participants in the company's stock plans are not able to purchase or sell stock.

GM's SEC filing Tuesday said that restriction will continue. Other participants in the plan, however, are still allowed to sell stock and may also exchange shares for other investment options or change their contribution election, GM said.

Wall Street showed its relief Monday over the government's plan to bail out Citigroup Inc. - a move it hopes will help address some of the uncertainty hounding the financial sector. Stocks jumped more than 3 percent, extending Friday's big rally.

While the markets anticipated last week that some sort of rescue could occur, investors appeared emboldened by the U.S. government's decision late Sunday to invest $20 billion in Citigroup and guarantee $306 billion in risky assets. The move by the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp. is only the latest effort this year to support a banking system troubled by bad debt and flagging confidence.

Besides implementing its $700 billion bailout plan for the overall financial industry, the government has bailed out insurance giant American International Group Inc. and taken over lenders Fannie Mae and Freddie Mac.

The market is also a little more optimistic because President-elect Obama is set to introduce his economic team on Monday and has called for another economic stimulus. His plan targets saving or creating 2.5 million jobs during the next two years. Any plan is expected to exceed the $175 billion Obama proposed during the campaign.

The moves by the government to again step in and help a troubled bank as well as perhaps the broader economy helped buoy investor sentiment. Still, investors remain cautious because the nation faces a difficult economy and the stock market likely will continue to see volatility.

In midmorning trading, the Dow Jones industrial average rose 317.00, or 3.94 percent, to 8,363.42.

Broader stock indicators also jumped. The Standard & Poor's 500 index advanced 35.29, or 4.41 percent, to 835.32, and the Nasdaq composite index rose 60.83, or 4.39 percent, to 1,445.18.

The rise in stocks follows a rally Friday that saw the Dow industrials jump 494 points, or 6.5 percent. The other major indexes also rose sharply. Still, stocks ended the week with a loss after heavy selling Wednesday and Thursday.

Bond prices were mixed Monday as investors examined the government's bailout plan for Citigroup. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.29 percent from 3.20 percent late Friday.

The Treasury bill market showed continuing high demand, a sign of investors' caution. The yield on the three-month T-bill, considered one of the safest investments, fell to 0.02 percent from 0.04 percent late Friday.

The dollar was mostly lower against other major currencies, while gold prices rose.

Wall Street shrugged off a larger-than-expected drop in sales of existing homes last month as investors instead focus on the government's rescue for Citigroup. And while the housing numbers fell short of expectations, Wall Street expected sales would fall sharply after last month's upheaval in the financial markets.

The National Association of Realtors says sales of existing homes fell 3.1 percent to a seasonally adjusted annual rate of 4.98 million in October. That's down from 5.14 million in September.

Citi shares surged $2.61, or 69 percent, to $6.38 on word of the government's injection of capital into the company.

Health care company Johnson & Johnson said Monday it would acquire Omrix Biopharmaceuticals Inc. for $438 million. The move is aimed at expanding J&J's surgical product unit; J&J will pay $25 per share for the company, an 18 percent premium over Omrix's close Friday of $21.16.

J&J rose 62 cents to $58.97, while Omrix rose $3.41, or 16 percent, to $24.57.

Overseas, in afternoon trading, Britain's FTSE 100 jumped 5.32 percent, Germany's DAX index rose 7.49 percent, and France's CAC-40 rose 7.34 percent. Hong Kong's Hang Seng index fell 1.59 percent; markets in Japan were closed for a holiday.

Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed

Shares of Borders Group Inc. plunged Friday after its top competitor reported disappointing third-quarter results, setting a dark stage for Borders to report its results next week.

Shares of Borders fell 26 cents, or 19 percent, to $1.11 Friday. Earlier in trading shares reached 72 cents, their lowest point ever.

Booksellers have been struggling more recently as consumers limit their spending on discretionary items such as books and music. They also face increased competition from discounters such as Wal-Mart and Target and online sellers such as Amazon.com.

Although Borders has been in a turnaround, it has been unable to find a buyer for the bulk of its business.

And its larger competitor Barnes & Noble reported a larger-than-anticipated loss Thursday, which doesn't bode well for Ann Arbor, Mich.-based Borders. The company is expected to report its third-quarter results Tuesday after the market closes.

Analysts surveyed by Thomson Reuters expect Borders to post a loss of 50 cents per share, on average, on revenue of $726.5 million. That compares with a loss of $161.1 million, or $2.74 per share, on revenue of $813.6 million in the year-ago quarter. The loss from continuing operations was 66 cents per share.

Standard & Poor's Equity Research reiterated its "Hold" recommendation on Borders but widened its per-share loss estimated to 60 cents from 45 cents, based on drops in traffic and increased promotion activity that could hurt margins.

S&P analyst Michael Souers said the trend is likely to continue and lowered his profit estimates for fiscal 2009 and 2010 and cut his target price to $1 from $7.

Stocks were trading lower Friday after Thursday's big rebound, as dismal retail sales figures forcing investors to focus on the economy. Signs of disunity in the government's response to the financial crisis also weighed on equities.

Federal Reserve Chairman Benjamin Bernanke, speaking at the ECB's Frankfurt Central Bank conference, prior to the G20 economic summit in Washington, said that central banks are in close contact and ready to take additional action if necessary, while liquidity measures have led to "tentative improvements" in credit markets. Bush says this will be first of series of meetings to deal with the global financial crisis.

On Friday around 11:30 am ET, the Dow Jones Industrial Average fell 279.72 points, or 3.17%, to 8,555.53. The broad S&P 500 index shed 32.58 points, or 3.58%, to trade at 878.71. And the tech-heavy Nasdaq composite dropped 68.81 points, or 4.31%, to 1,528.03.

On the New York Stock Exchange, 24 stocks were trading lower for every four posting gains, while on the Nasdaq the ratio was 19-5 negative amid moderate trading.

In economic news, October retail sales fell record 2.8%. Excluding autos, building materials and gasoline (the components of the report that feeds into the calculation of nonauto goods consumer spending within GDP), retail sales fell 0.5% in October.

Even after adjusting for price-related drops in gas station sales, this report suggests that consumer spending started the fourth quarter on a very weak note. RDQ Economics estimated that real personal consumption expenditures fell by 0.4% in October and will decline by at least 3%, and possibly more than 4%, for the entire fourth quarter. Much will hinge on the November release of retail sales in fine-tuning the GDP estimate for the fourth quarter, RDQ Economics said in an email note.

Import prices fell 4.7% -- exceeding the 4.4% downturn that was widely expected.

U.S. business inventories fell 0.2% in September and included a 0.2% decline in retail inventories with a 0.3% drop for vehicle inventories, but stronger than expected figures for the remaining components. Inventories had been expected to rise.

The University of Michigan Consumer Sentiment Survey showed an increase in the preliminary reading to 57.9 in November, better than the expected 55.0 after October's 57.6 reading.

U.S. FDIC unveiled a mortgage modification plan aimed at 2.2 million home loans, with incentives for mortgage servicers to modify loans and reset affordable monthly payments. The plan is projected to cost $24.4 billion to the government and potentially prevent some 1.5 million foreclosures, with servicers paid $1,000 toward modification expenses and the FDIC to share up to half the losses in the event of default. The FDIC would manage the plan on the behalf of the Treasury and it appears funding would come from the TARP. The Treasury Dept. is so far not supporting the plan.

Uncertainty surrounds the financial rescue package known as Troubled Asset Relief Program, or TARP. On Tuesday, Treasury Secretary Henry Paulson switched gears by announcing that TARP funds would not be used to purchase illiquid mortgage-related assets from financial institutions. Two months ago, Paulson said TARP would act as a clearinghouse for toxic credit assets such as mortgage-backed securities. Instead, Paulson said those funds will continue to be used to buy shares in banks. The painful downside is that the TARP switcheroo has made matters worse for banks that held assets waiting for a TARP rescue and now must sell them in a far worse market and economy than two months ago, according to the Wall Street Journal. Today is the deadline for banks to apply for cash from the $700 billion TARP plan.

Paulson's latest TARP flip-flop has hammered asset-backed securities, reports the Wall Street Journal. Markit's ABX index of 2006-vintage, triple-A-rated subprime-mortgage securities has fallen 13% since Wednesday to a record low. The cost of default protection on commercial-mortgage debt has jumped to a record high.

A disheartened Wall Street fell for the third straight session Wednesday as investors absorbed another series of dismal corporate reports and news that the government won't buy banks' soured mortgage assets after all. The Dow Jones industrials skidded 410 points, and all the major indexes dropped more than 4 percent.

The market started the day falling on more signs that companies are being hurt by a severe pullback in consumer spending. Macy's Inc. said it lost $44 million in the third quarter as sales at the department store retailer fell more than 7 percent. And consumer electronics retailer Best Buy Co. slashed its fiscal 2009 guidance on fears that consumer spending will erode even further.

Meanwhile, Morgan Stanley, suffering from the ongoing losses on Wall Street, outlined plans to cut 10 percent of staff in its institutional securities group - its biggest business that covers everything from investment banking to stock trading.

The bleak reports, which followed disappointing news from coffee retailer Starbucks Corp. and homebuilder Toll Brothers Inc. earlier in the week, made it increasingly clear to investors that companies across the economy are suffering from the aftermath of the housing and credit crises.

"There just doesn't appear to be an end in sight to the bad news," said Anton Schutz, portfolio manager of the Burnham Financial Industries Fund and the Burnham Financial Services Fund. "The selling is relentless."

There was more pain at mid-morning, when Treasury Secretary Henry Paulson said the government's $700 billion financial rescue package won't purchase troubled assets from banks. He said that plan would have taken too much time, and that the Treasury instead will rely on buying stakes in banks and encouraging them to resume more normal lending.

While the market had been pleased by the government's decision weeks ago to buy banks' stock, investors still hoped to see the financial industry relieved of the burden of the mortgage assets whose decline in value helped set off the nation's financial crisis. His comments, which underscored the anxiety that remains about the health of the financial system, sent stocks falling further.

Analysts believe the market is in the process of retesting the intraday low hit on Oct. 10, when the blue chips fell to 7,882.50.

"We're just going through the typical process of testing and retesting," said Matt King, chief investment officer of Bell Investment Advisors. "If we can continue to build higher and higher lows, that's definitely a positive. If the Dow can build a base above 8,100 and bounce off that, we see that as a definite technical positive."

The selling accelerated in the last hour of the day, as it has done in most sessions over the past two months.

"When there is a lot of volatility, especially on a big down day, people just decide they don't want to own stocks overnight," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research. "News doesn't drive this lower, fear does. Investors will back the next morning after they see where things settled."

According to preliminary calculations, The Dow shed 411.30, or 4.73 percent, to 8,282.66.

The broader Standard & Poor's 500 index dropped 46.65, or 5.19 percent, to 852.30, and the Nasdaq composite index stumbled 81.69, or 5.17 percent, to 1,499.21.