The markets also benefited from a rebound by Chinese stocks, as the Chinese Shanghai Composite Index jumped by 2% overnight.
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Chinese stock trading halted for the day Thursday after a key index, the CSI 300, plunged 7 percent, tripping a “circuit breaker” that is meant to dampen volatility.
Still, Japan and Europe do a lot more business in China than the USA does, and as a result, they face higher risks.
Apple shares snapped their three-day losing streak and were up 0.5 percent, giving the biggest boost to the three major indexes. The EURUSD rate fell 0.5% to $1.0880 while the FTSEurofirst index and STOXX index lost 2% each. The Nasdaq has fallen for six days straight.
After this week’s stock market turbulence triggered by China, investors will begin to contend with another expected decline in corporate earnings as the reporting season begins.
“The management of the Chinese economy is the real concern”, said John Canally, chief economic strategist at LPL Financial.
The Dow Jones industrial average sank 392.41 points, or 2.3 percent to 16,514.10. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 2.146%.
The PSEi, the 30-company benchmark of the Philippine Stock Exchange, lost another 43 points, or 0.7 percent, to close at 6,575.43 Friday, the lowest since it settled at 6,561.20 on April 4, 2014.
The Standard & Poor’s 500 index rose 11 points, or 0.6 percent, to 1,953.
It was the worst one-day drop on Wall Street since late September, with the Dow Jones industrial average shedding almost 400 points.
The crash in China’s markets had a broad global impact. Germany’s DAX slid 2.3 percent, the France CAC 40 gave up 1.7 percent, and Britain’s FTSE 100 lost 2.1 percent. Kohl’s fell $2.98, or 5.9 percent, to $47.88 and Macy’s lost $1, or 2.7 percent, to $35.89. In commodities Brent crude settled down 48 cents at $33.75 on Thursday, after sliding to a low of $32.16, a level last seen in April 2004. Evans added that slower growth in the number of available workers, an aging population and possible slower technological progress compared to the last 20 years were among the factors that could lead to what he described as the troubling feature of lower long-run growth.
The PSEi also hit a new 52-week low of 6,555.45 intraday in Friday’s trading.
Nonfarm payrolls surged in December and unemployment rate held steady at five per cent.
The wild swings across Asia were reminiscent of the summer’s China-linked worldwide turmoil owing to increasing concerns about Beijing’s ability to control a slowdown in the world’s number-two economy.
Thursday’s selling was linked to weakness in the yuan, as the government’s decision to let the currency get weaker may be a sign of weakness in China’s economy.
“China’s been such a big driver of global growth for 15 years and now they’re not, and they don’t seem to have a plan for the next 15 years”, said Canally.
“China’s stock market is among the world’s most expensive, the macroeconomic fundamentals are deteriorating and investors have been spooked by the incessant fudges to the market by the regulators”. The Nasdaq is down 6.4 percent.
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STILL FALLING: Oil prices, which have fallen to their lowest prices in more than a decade, also lost ground. Silver declined 42.6 cents, or 3 percent, to $13.918 an ounce. That helped send copper producer Freeport-McMoRan down 64 cents, or 10.5 percent, to $5.53.
