Updated from 9:46 a.m. EDTFollowing precipitous declines in the major world indices, stocks on Wall Street were taking heavy losses Friday, as forced liquidations continued and fear of a global economic slowdown intensified. The Dow Jones Industrial Average was down 412 points at 8280, and the S&P 500 gave back 46 points to 862. The Nasdaq tumbled 69 points to 1535. Michael Strauss, chief economist and strategist at Commonfund, said that liquidations by funds needing quick capital took place overnight and contributed to a selloff in world markets. An unwinding of carry trades in the foreign exchange market played in to those declines, he said. "Obviously the U.S. got caught in some of that in the preopening," he continued. Premarket futures for the major averages hit their limit lows before the open, logging their maximum possible losses and triggering a cessation in the selling. "Maybe this is the final capitulation," said Strauss, who added that the market isn't necessarily reacting to gloomy economic data. "Everyone's expecting the numbers to be weaker. Tell me who's not expecting weaker GDP in the U.S." Considering the turmoil, Nouriel Roubini, an economics professor at New York University, believes hundreds of hedge funds could collapse and that financial markets might need to be temporarily shut down in order to stem the massive asset selling, Bloomberg also reported. 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.