Stocks Plunge as Global Selloff Spreads to U.S.

In a sign that investors were looking for safety, longer-dated U.S Treasury securities were skyrocketing in price. The 10-year note was up 1-9/32, yielding 3.52%. The 30-year was up 3-4/32 to yield 3.88%.

Overseas, European indices were falling sharply, as London's FTSE and Frankfurt's DAX were each down nearly 9%. In Asia, the Nikkei in Japan and the Hang Seng in Hong Kong closed with significant losses.

The foreign exchange market was seeing monumental moves in some cases, with the dollar registering significant changes against its major counterparts. The euro was losing 1.8% to $1.26, and the pound was sinking 3.2% to $1.56. The Australian dollar was off nearly 6% against the greenback.

However, the dollar was surrendering 3.8% to the yen and 0.5% to the Swiss franc.

Lending markets had slowed a trend of loosening that had emerged in previous sessions. Three-month dollar Libor, a measure of the rate banks charge one another for large loans, was down slightly at 3.52%. The cost of overnight borrowing rose 7 points to 1.28%.

In company news, PNC Financial Services (PNC Quote) and National City (NCC Quote) announced a merger agreement. PNC will buy National City for $5.2 billion, $2.23 a share in a cash-and-stock deal.

Separately, U.K. insurance firm Prudential(PUK Quote) was considering the purchase of segments of struggling U.S. insurer AIG(AIG Quote). AIG has been attempting to sell parts of its asset portfolio to avoid going bankrupt.

As for corporate earnings, following Thursday's close software titan Microsoft(MSFT Quote) reported results that beat estimates but issued a cautious revenue forecast for the coming quarter.