U.S. stocks fluctuate after declines in Europe and Asia

U.S. stocks fluctuated between gains and losses on Friday, a day after the Dow Jones industrial average fell by 419 points. The markets had opened lower on Friday morning, following declines in Asia and Europe, but managed to rebound by midday.

By 12:20 p.m. in New York, the Associated Press reports, the Dow had fallen 42 points or 0.4 percent, to 10,947. The Standard & Poor's 500 index had dropped 1 point, or 0.1 percent, to 1,139. And the Nasdaq composite index had risen 5 points, or 0.2 percent, to 2,386.

There was little economic news to influence trading. JPMorgan Chase cut its forecast for economic growth during the fourth quarter. And the Dow's drop, according to the AP, was largely due to Hewlett-Packard, which fell 21 percent. HP, the world’s largest computer maker, announced on Thursday that it wants to buy British business software maker Autonomy for $10.3 billion, and said it is considering spinning off its personal computer business into a separate company.

“I think it is this wrestling match between the fear and paranoia that drove the market yesterday, and people realizing stocks are really cheap here and bargain hunting,” Uri Landesman, president of Platinum Partners, told the The New York Times.

The Times also notes that with "deep concerns about the euro zone and global economic growth overshadowing the financial markets," it is far from certain whether any stock gains will last.

“The market is trading off of really primal fear,” Peter Kenny, a managing director in institutional sales at Knight Capital Group Inc., told Bloomberg. “There’s fear that Europe represents a risk to the global markets, there’s fear of a recession. This is a very policy-driven approach to pricing amid a lack of enthusiasm on the part of the Europeans, specifically the Germans, not willing to assume any more risk. The reason that the market is not selling off more broadly today goes back to the sense that valuations beg for attention.”

According to Bloomberg, hedge funds are at their most bearish since 2009.

The fluctuations on Wall Street followed earlier declines in Europe and Asia on Friday. From the AP:

Overseas stock markets had larger drops than in the U.S. European banking stocks fell near two-and-a-half-year lows, dragged down by rumors about banks' potential losses on bonds issued by heavily-indebted governments. The selling in the U.S. has come in part because of fears that U.S. banks would be hurt if European countries default on their debt. Another concern: weakening European economies will hurt growth in the U.S.

Asian markets fell sharply, with Tokyo losing 2.51 percent, Seoul 6.2 percent, Hong Kong 2.6 percent and Sydney 3.51 percent.