Caterpillar Inc., the largest maker of bulldozers, and homebuilder D.R. Horton Inc. slumped more than 7 percent on a Commerce Department report that construction of single-family homes plunged to the lowest level in a quarter century. The Dow Jones Industrial Average climbed more than 300 points before surrendering gains in the final hour of trading.
The S&P 500, which rose as much as 4 percent, ended down 5.88 points, or 0.6 percent, at 940.55, trimming its best weekly advance since February. The Dow retreated 127.04, or 1.4 percent, to 8,852.22. The Nasdaq Composite Index slipped 0.4 to 1,711.29. Four stocks retreated for every three that gained on the New York Stock Exchange.
Europe's Dow Jones Stoxx 600 Index added 3.8 percent today, while the MSCI Asia Pacific Index rose 0.4 percent.
Canadian stocks rose, pushing the main index toward its biggest weekly gain in six years, as energy companies advanced on higher crude-oil prices and financial shares climbed on accounting rule changes. The Standard & Poor's/TSX Composite Index climbed 2.9 percent, to 9,539.30. The index has gained 5.2 percent this week, the most since October 2002. The S&P/TSX has still fallen 37 percent from its June 18 peak after mining and energy shares slumped along with commodity prices on concern that more than $640 million in credit losses at financial institutions worldwide will cause a global recession.
Brazilian stocks rose, sending the Bovespa index toward its first weekly gain in a month, as a rebound in raw-material prices lifted commodity producers and Brasil Telecom Participacoes SA rallied after the government approved a takeover that will create the biggest phone carrier. The Bovespa index rose 342.48, or 0.94 percent, to 36,784.20. The gauge lost 20 percent last week. The index swung between gains and losses earlier today on increased U.S. volatility as almost 80 million options expire.
European stocks rose, with the Dow Jones Stoxx 600 Index rebounding from its steepest two-day retreat since 1987, on better-than-estimated earnings from Google Inc. and Sony Ericsson Mobile Communications Ltd. and lower money-market rates.
National benchmark indexes gained in all 18 western European markets except Austria, Greece and Iceland. The U.K.'s FTSE 100 added 5.22 percent, and France's CAC 40 rose 4.68 percent. Germany's DAX increased 3.43 percent.
Japanese stocks rebounded from their worst plunge in two decades as the deepening financial crisis prompted investors to buy companies whose earnings are insulated from a slowdown in overseas markets. The Nikkei 225 Stock Average climbed 235.37, or 2.8 percent, to close at 8,693.82 in Tokyo.
Australian stocks fell as mining companies retreated. The S&P/ASX 200 Index dropped 42.60 points, or 1.1 percent, to 3,970.80 at the close in Sydney.
Indian stocks fell, with the benchmark Sensitive Index declining to its lowest in more than two years on speculation that overseas funds faced with redemptions are selling the nation's equities. The Bombay Stock Exchange's Sensitive Index, or Sensex, fell 606.14, or 5.7 percent, to 9,975.35, its lowest since June 20, 2006.
China's stocks rose for the first time in four days after the regulator said it would take measures to stabilize the country's financial markets. The CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, rose 12.36, or 0.7 percent, to 1,833.26 at the close, snapping a three-day, 8.3 percent retreat.
Russian stocks fell after Finance Alexei Kudrin predicted further declines for the country's equities market because of the global credit crisis. he ruble-denominated Micex Index sank 4.34 percent to 599.64 after earlier advancing as much as 6.4 percent.