On the upside, Europe is getting closer to passing a proposal to expand the eurozone bailout fund. The last two countries to approve the plan were Germany and Estonia on Thursday. However, a more comprehensive plan of possibly levering up the fund to inject capital into the European financial system is still in debate.
"The drama in Europe continues to play out like a dreary soap opera with daily twists and turns," according to investment firm D.A. Davidson & Co. "Traders have been whipsawed by highly volatile stock market price action as unexpected rumors or reports on the European situation continue to hit the tape."
China-based companies with U.S. listings continue to face pressure after Reuters reported Thursday afternoon that the U.S. Justice Department and Securities and Exchange Commission are digging deeper into the companies' accounting practices.
In corporate news, trading of Eastman Kodak (EK) shares was halted after the stock plunged on reports that the company hired law firm Jones Day for restructuring advice. The stock lost 53.8% to 78 cents.Chipmaker Micron Technology (MU) posted a surprise quarterly loss on flat sales and declining margins. The company said it lost $135 million, or 14 cents a share, for the fourth quarter on revenue totaling $2.14 billion, down from a year-ago profit of $342 million, or 32 cents a share, on revenue of $2.49 billion. Micron also gave a word of warning to investors about the coming jury decision in its antitrust case with Rambus (RMBS), saying it can't "reasonably" estimate the range of possible losses from the suit. Shares plunged 14.1% to $5.04. Industrial and commercial products company Ingersoll-Rand (IR) has lowered its third-quarter earnings projections to 77 cents a share to 80 cents a share, from 85 cents a share to 95 cents a share. Shares fell 12.1% to $28.09. The benchmark 10-year Treasury rose 26/32, diluting the yield to 1.910%. The euro dropped while the dollar strengthened against a basket of currencies, with the dollar index up 1.108%. Gold for December delivery gained $5, or 0.3%, to settle at $1622.30. The November crude oil contract lost $2.94, or 3.6%, to settle at $79.20 a barrel. -- Written by Chao Deng and Melinda Peer in New York.