Stock prices fluctuated sharply, as they often do the day after a big slide. The Dow Jones industrial average was down about 100 points

Stock prices fluctuated sharply, as they often do the day after a big slide. The Dow Jones industrial average was down about 100 points in early afternoon trading, having been down as much as nearly 280 points earlier. Traders remained anxious amid questions about what caused Thursday’s sudden drop, which sent the stocks of several companies briefly to almost zero.The market looked past a surprisingly strong report on the U.S. jobs market and focused instead on Europe’s spreading debt crisis and Thursday’s plunge. The Dow was down nearly 1,000 points Thursday afternoon — its largest one-day drop — before recovering two-thirds of its losses.

In early afternoon trading the Dow fell 96.28, or 0.9 percent, to 10,424.04. It had been down as much as 279 in earlier trading, and at a few points recouped all its losses for the day before slipping again in the early afternoon.The Standard & Poor’s 500 index fell 11.56, or 1 percent, to 1,116.59, while the Nasdaq composite fell 32.70, or 1.4 percent, to 2,286.94.Falling stocks outpaced gainers two-to-one on the New York Stock Exchange, where volume was a heavy 1.1 billion shares.

Technology stocks were particularly hard hit following reports that Nokia Corp. was broadening its legal fight against rival cell phone maker Apple Inc. to include the iPad, Apple’s new hit product. Apple shares fell 2.6 percent in heavy trading.Meanwhile Europe’s debt problems again weighed on stocks. Germany’s parliament approved Berlin’s share of the rescue package after a boisterous debate. However, investors still fear that Greece may not make a May 19 deadline to make a debt repayment.

Investors’ concern goes far beyond Greece, the smallest economy in the European Union. A further loss of confidence in European government debt could have an impact on other weak countries like Portugal, potentially requiring another difficult bailout process. The debt crisis has already badly undermined Europe’s shared currency, the euro.

“You’re not concerned about the kid with the cold, but how he spreads it to the rest of the class,” said Len Blum, a managing partner at investment bank Westwood Capital. Blum noted that Greece’s debt problem could be similar to the subprime mortgage meltdown in the U.S., which quickly spread to other parts of the financial system.Friday’s trading left the Dow down about 4 percent for the week and barely in the black for the year. The S&P was also down about 5 percent, while the Nasdaq was off 6 percent. The S&P and Nasdaq were also both still positive for 2010.The week’s losses would put the market about halfway through what experts call a “correction,” usually defined as a drop of between 10 percent and 20 percent following a sustained rise.

Stocks have been on a nearly uninterrupted upward path since March of last year, when indexes hit 12-year lows. Analysts have been predicting a correction for months, only to see the market bounce back after brief periods of decline.Long-term market watchers actually welcome occasional pullbacks in the market, saying that gives investors opportunities to pick up shares at bargain prices.”A corrective phase is in play,” said Rob Lutts, president and chief investment officer at Cabot Money Management.

If he’s right, this correction would be far faster than the historical average. “We used to take weeks and months to do what we now do in days,” Lutts said.In economic news, the Labor Department reported that employers added 290,000 jobs last month, far more than expected and the biggest jump in four years. However the jobless rate rose to 9.9 percent from 9.7 percent as more people looked for work.

The big improvement in the jobs report brought some clarity to the biggest question remaining for the U.S. economy: When employers would start hiring again. Despite positive signs in manufacturing and housing, job creation has been lagging far behind other sectors of the economy, a worrisome point for economists. Friday’s report may help change that perception.”It’s a good-size number and it had a lot of breadth,” said John Silvia, chief economist at Wells Fargo. “There isn’t a double-dip out there. The employment situation suggests that we have a sustained economic recovery in the U.S. Companies are hiring people.”

Apple fell $6.37, or 2.6 percent, to $239.88.Oil fell, and gold rose. The dollar was mostly lower against most currencies. The euro clawed back some ground against the dollar after several days of declines.European markets were broadly lower.The declines were deepest in France, where the CAC-40 index tumbled 4.6 percent. Germany’s DAX fell 3.3 percent and Britain’s FTSE 100 fell 2.6 percent. Japan’s Nikkei fell 3.1 percent.

World markets fell Friday after the U.S. Federal Reserve unexpectedly raised interest rates for emergency bank loans

LONDON  World markets fell Friday after the U.S. Federal Reserve unexpectedly raised interest rates for emergency bank loans, triggering fears that regular borrowing costs could also move higher soon, slowing the recovery in the world’s largest economy.The central bank said Thursday it will bump up the “discount” lending rate by one-quarter point to 0.75 percent effective Friday, part of a pullback of the extraordinary aid it provided to fight the financial crisis.Although the Fed said the step should not be seen as a signal that it will soon boost interest rates for consumers and businesses, markets were spooked.After sharp drops in Asia, Germany’s DAX stock index was down 0.2 percent at 5,671.28 and Britain’s FTSE 100 was flat at 5,326.84. France’s CAC-40 fell 0.2 percent to 3,742.09.Wall Street was also expected to fall on the open. Dow Jones industrials futures were down 50 points at 10,325.00 and Standard & Poor’s 500 futures were 8.2 points lower at 1,097.40.

Growing optimism about the strength of the U.S. economy had helped boost the Dow Jones industrial average rise by 3 percent over the past three days. But the surprise Fed announcement after Wall Street trading closed left traders wondering whether the so-called “exit strategy” from a loose monetary policy could come faster than expected and stifle U.S. consumer demand.”It begs the questions of why this was not done, or at least signaled at a regular Federal Open Market Committee meeting,” said Marc Ostwald, strategist at Monument Securities in London.”It certainly is the case that the Fed wants to see how money markets function without so much of the liquidity life support that the Fed has been providing, and as such one can term this a form of ‘kite flying’,” said Ostwald.The Fed move, which doesn’t change consumer borrowing rates, also helped boost the U.S. dollar and push the euro below nine-month lows – a sign traders may be turning away from higher-risk investments, analysts said.The euro fell to $1.3504 from $1.3529 late Thursday after trading at nine-month lows below $1.3400. After rising against the Japanese yen, the dollar was flat at 91.75 yen.

The euro has been under pressure in recent months over worries about the debt problems of Greece and other countries in Europe, such as Portugal and Spain. Although the EU said it was committed to helping Greece in case of a default, it did not provide any concrete plans for a bailout but limited itself to demand more spending cuts.Economic data in Europe, meanwhile, failed to shore up investor sentiment. The purchasing managers’ survey of the eurozone, an economic indicator published by Markit research group, was stable in February, suggesting the recovery from recession has stagnated somewhat.A rise in the manufacturing reading offset a drop in the services sector, providing “little hope that the much-needed domestic recovery is beginning to materialize,” said Ben May, European economist at Capital Economics in London.Markets in China and Taiwan are closed this week for the Lunar New Year holiday.Earlier in Asia, Hong Kong’s Hang Seng stock index led decliners, diving 528.13, or 2.6 percent, to 19,894.02 while Japan’s Nikkei 225 stock average dropped 212.11, or 2.1 percent, to 10,123.58.”As the dollar strengthens, we see less appetite for riskier assets such as Asian stocks.” said Jit Soon Lim, head of equity research for Southeast Asia for Nomura in Singapore. “We’re bullish on the region’s economic growth, but bearish on risk.”

South Korea’s Kospi declined 27.29, or 1.7 percent, to 1,593.90. India fell 1 percent and Indonesia dropped 0.5 percent.Singapore’s stock measure retreated 0.9 percent despite an increase of the government’s 2010 economic growth forecast to between 4.5 percent and 6.5 percent from 3 percent to 5 percent.In the U.S. on Thursday, the Dow rose 83.66, or 0.8 percent, to 10,392.90 while the broader Standard & Poor’s 500 index rose 7.24, or 0.7 percent, to 1,106.75. The Nasdaq composite index rose 15.42, or 0.7 percent, to 2,241.71, its fifth straight advance.Oil prices slid to near $78 a barrel after the Fed’s rate hike sent the U.S. dollar higher.Benchmark crude for March delivery was down 90 cents at $78.16 in electronic trading on the New York Mercantile Exchange. The contract added $1.73 to settle at $79.06 on Thursday.(AP)