Stocks close mixed in volatile trading day

n volatile trading Friday, the Dow Jones industrial average swung between triple-digit point gains and losses as investors couldn't make up their minds whether it is safe to buy stocks again after Thursday's 513-point drubbing.After a better-than-expected report on jobs, stocks started the day higher but those gains evaporated as investors kept looking for reasons to sell. Then at midday stocks recovered and continued to bounce back and forth into positive and negative territory.

The Dow swung in a 416-point range as it fell as much as 244 points and rose as high as 171 points before closing up 61 points, or 0.5%, to 11,445.

The Standard & Poor's 500 index dipped 0.70, or 0.1%, to close at 1,199.37. Technology stocks, which had been an area of strength all year, took the brunt of the selling today as the tech-heavy Nasdaq composite index dropped 23.98, or 0.9%, to 2,532.41.

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"The overhang of what has been going on the last few days has spiraled," says Oliver Wiener, trader at BTIG. "In a normal cycle (you) would have seen a normal unwind. But the way the market is trading … when things are going to go down, the volatility uncoils very fast."

All three major stock market indexes remain squarely in a correction, signaled by a decline of 10% or more from their highs. Investors have been selling on fears the problems with the economy are serious, says Michael Holland of Holland and Co. It's "the realization that the problems are really deep and the solutions are not going to be quick. Each day is another reminder of the deep-seeded nature of the problem," Holland says.

Yet, investors would be foolish to sell at these depressed prices, Holland says. "Fortunes are made in situations like this. I would not be a seller, (but) looking for things to own," Holland says.

Stock trend

Dow Jones industrial average, five trading days

And there's a clear battle between those worried the economy's problems are serious and investors looking to scoop up bargains, Wiener says. "There's support around here, and people trying to hunt bargains due to the speed of the move," he says.

Investors are increasingly concerned about the economy in the U.S. and abroad. Among the issues: The building financial crisis in Europe; hiring in the U.S. that is too slow to significantly lower the unemployment rate; anemic growth in manufacturing, the service sector and a decline in consumer spending; and the belief that the government has might not do more to stimulate the economy.

European leaders have interrupted their summer vacations for emergency meetings. They are trying to craft a plan that would prevent Italy or Spain from becoming the latest countries in the region to require large-scale financial help.

The two countries have Europe's third and fourth largest economies. But European leaders and central bankers might not have the cash needed to prop them up until a larger financial rescue fund can be established by a broader group of financial leaders.

The U.S. economy added 117,000 jobs in July, and hiring in May and June were not as bad as reported previously, the Labor Department reported. The unemployment rate inched down to 9.1% from 9.2%, partly because some unemployed workers stopped looking for work. Health care providers and

"From an economic standpoint, 117,000 jobs is hardly sufficient to boost the economy," he said. He said it is impossible to tell how long the nervousness will affect the market, but he said it will more likely be years than months.

About twice as many jobs as that must be created every month in order to rapidly reduce the unemployment rate. It has been above 9% nearly every month since the recession officially ended in June 2009. Many economists fear that the economy might dip back into recession.

Overseas markets also fell. Tokyo, Hong Kong and China all closed down 4%. Taiwan lost 6%. In Europe, shares recovered some of their losses after plunging to their lowest levels in more than a year. Germany's DAX index fell 2.8%. Other indexes showed smaller losses.

The yield on the 2-year Treasury note fell to 0.29%, after brushing a record low of 0.26% earlier Friday. Frightened investors are buying Treasurys, sending their prices higher and yields lower. The yield on the benchmark 10-year Treasury note rose to 2.48% after hitting a low since last year of 2.34%.The rush to buy Treasurys is another key reason why markets are moving up and down in such big swings, said Karen Shaw Petrou of Federal Financial Analytics. Many investors are seeking a safe haven from unstable equity markets.

Contributing: Associated Press