Wall Street Limits Damage

The Dow plunged 387 points-- its biggest one-day point loss since the 416-point drop Feb. 27. The S&P 500 shed 44 points and the Nasdaq dropped 56.

Foreign stocks also tumbled, and after providing $131 billion in loans during the previous session, the European Central Bank offered another $84 billion to the bank system overnight. Both the Japanese and Australian central banks said they would follow the same lead and add funds to the banking system.

Back in the U.S., Treasuries, viewed as a safe harbor in turbulent times, rallied. On Friday, the 10-year note finished up 9/32 in price, yielding 4.73%, and the 30-year bond surged 24/32, yielding 2.97%.

In economic news, the government said Friday that U.S. import prices rose for a fifth-straight month, raising the possibility that cheap imports may not continue to keep a lid on inflation in the future. Import prices jumped 1.5% in July, according to the Labor Department, beating expectations on Wall Street for a 1% increase. In June, import prices climbed 0.9%, revised down from the previously reported measure of 1%.

Among stocks, EchoStar (DISH Quote) posted a 33% rise in second-quarter earnings, meeting expectations on Wall Street. Shares rose 1.2%.

Nvidia (NVDA Quote) after the prior close said that its second-quarter profit doubled from a year ago, beating expectations. However, the chipmaker said there were supply constraints due to strong demand for its products, prompting a downgrade from Merrill Lynch. Shares of Nvidia fell 4.6%.