Updated from 9:23 a.m. EDTFollowing precipitous declines in the major world indices, stocks on Wall Street were plummeting at the open Friday, as fear of a global economic slowdown intensified. The Dow Jones Industrial Average was down 440 points at 8252, and the S&P 500 gave back 44 points to 864. The Nasdaq tumbled 97 points to 1507. Before trading began, futures on the major indices hit the lowest levels permitted. Premarket futures are limit-down, meaning that they cannot exceed a given loss. In a sign of deep investor trepidation, futures for the S&P 500, the Dow and the Nasdaq had all been trading with their maximum permissible losses. "Right now it's panic selling. Where it will end, nobody knows," said Doug Roberts, chief investment officer at ChannelCapitalResearch.com. He said that funds are continuing to liquidate and broad selloffs in overseas markets are stoking investor fear. It's too soon to tell whether the market is reaching capitulation levels, he said. The credit crunch was once again in focus. Bloomberg reported that the Treasury Department was ready to invest in regional banks as part of a $250 billion effort to capitalize banks. The Treasury already spent $125 billion on nine of the biggest U.S. banks. Meanwhile, U.S. equities weren't the only asset class in deep trouble during the final session of the week. Crude oil was dropping $4.32 to $63.52 a barrel, despite an announcement by OPEC that it would reduce production by 1.5 million barrels a day in an effort to support falling prices. Gold was losing $9 to $705.70 an ounce.
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) and National City ( NCC) 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) was considering the purchase of segments of struggling U.S. insurer AIG ( AIG). 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) reported results that beat estimates but issued a cautious revenue forecast for the coming quarter.
Looking at the day's economic data, the National Association of Realtors is slated to release its October existing-home sales figures. ( Photo gallery: Trading Faces)