Recession worries pushed US stocks lower today, but the decline was shallower than feared at first as an emergency interest rate cut by the Federal Reserve helped to ease investor fears and stabilize global markets.
Declines were fairly broad-based, with Procter & Gamble , the world's largest household products company, down 2.6 per cent at $65.40 and Exxon Mobil, down 2.2 per cent at $83.21, among the biggest falling shares in both the Dow industrials and S&P 500.
But investors bought financial stocks, which benefit from lower borrowing costs, as well as retailers. The financial sector was among the S&P 500's major gainers, while retailers led gains on the Dow.
Home builders also were in positive territory after the Fed cut interest rates by 75 basis points in an unusual decision between its regularly scheduled policy meetings.
The Federal Open Market Committee is set to meet next Tuesday and Wednesday. The US central bank's move followed two days of steep losses in Asian and European equities on worries that a deteriorating US economy would drag other regions down with it.
The Dow Jones industrial average was down 117.95 points, or 0.97 per cent, at 11,981.35. The Standard & Poor's 500 Index was down 14.74 points, or 1.11 per cent, at 1,310.45.
The Nasdaq Composite Index was down 39.53 points, or 1.69 percent, at 2,300.49
The Dow was down almost 465 points at its session low, while the Nasdaq, within minutes of the opening bell, dropped to a level indicating it had crossed the threshold of what is considered a bear market - a fall of 20 per cent from its October closing high.