Sears Holdings Corp., Home Depot Inc. and Office Depot Inc. sank more than 7.6 percent on government data showing sales at retailers declined 2.8 percent last month. Qualcomm Inc., the biggest maker of mobile-phone chips, slid 5.4 percent and Motorola Inc. dropped 11 percent after Nokia Oyj predicted global shipments will shrink next year. The Standard & Poor's 500 Index erased about two-thirds of yesterday's 6.9 percent rally and extended its weekly tumble to 6.2 percent.
The S&P 500 lost 4.2 percent to 873.29 as all 10 main industry groups retreated at least 2.8 percent. The Dow Jones Industrial Average decreased 337.94 points, or 3.8 percent, to 8,497.31. The Nasdaq Composite Index slipped 5 percent to 1,516.85. Twelve stocks fell for each that rose on the New York Stock Exchange.
Canadian stocks had their worst weekly slide in a month after energy and financial companies fell today on a record drop in U.S. retail sales fueled concern the recession will cut demand for Canada's exports. The Standard & Poor's/TSX Composite Index fell 3.2 percent to 9,055.96 in Toronto.
European stocks gained, trimming this week's retreat in the Dow Jones Stoxx 600 Index, as European Aeronautic, Defence & Space Co. and Vinci SA reassured investors on the outlook for earnings.
The Stoxx 600 added 0.8 percent to 205.75 at the close, trimming its loss this week to 6.3 percent. Oil, mining and insurance stocks led gains among the gauge's 19 industries.
National benchmark indexes advanced in all of the 18 western European markets except Finland, where Nokia Oyj led declines, and Belgium. The U.K.'s FTSE 100 added 1.5 percent. Germany's DAX jumped 1.3 percent and France's CAC 40 rose 0.7 percent.
Asian stocks rose, paring a weekly decline, as commodity producers climbed after oil and metal prices rallied and investors snapped up shares trading near the cheapest valuations on record.
Japan stocks climbed, easing a weekly drop, as investors snapped up shares near the cheapest valuations on record, the yen fell and expectations grew that a financial summit this weekend will produce policies to stabilize markets. The Nikkei 225 Stock Average gained 223.75, or 2.7 percent, to close at 8,462.39 in Tokyo, after having risen as much as 5.5 percent.
Australian S&P/ASX 200 Index rose 50.80 points, or 1.4 percent, to 3,748.10 at the close in Sydney, paring its weekly decline to 7.5 percent.
China's stocks rose, sending the benchmark index to its best week since April, after the government pledged higher spending on agriculture and on speculation the central bank may cut borrowing costs. The CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, climbed 69.57, or 3.7 percent, to 1,943.65 at the close.