Hopes that Wall Street won't repeat the scale of Monday's losses helped limit the selling during European trading hours.
The turmoil began late last week amid fears of increasing inflation, when the Dow lost 1,175 points - the biggest one-day points loss in its 122-year history.
"While today would be crucial in seeing if the bulls can wrestle back control for Asian markets, it does appear that we have finally entered a period of increased volatility", says Jingyi Pan, market strategist at IG in Singapore.
"However once this kind of stampede starts it's hard to stop".
Early this morning USA time, Dow futures predicted the industrial average would open approximately 220 points down. Over $5 trillion has been wiped from global stock markets since January 26, according to S&P Dow Jones Indices.
Measured by points, Monday's drop was the largest on record for the Dow and the S.&P. 500. The loonie has fallen nearly 1.3 per cent against the USA dollar since Friday.
US stocks moved sharply higher in early trading Friday, recouping some of the ground lost a day earlier when indexes plummeted, deepening a weeklong sell-off that knocked the market into a "correction" for the first time in two years.
Stephen Schwarzman, the chairman and CEO of financial firm Blackstone, warned recently of a potential "reckoning" in markets.
A correction is less severe than a bear market, when stocks decline 20% from their recent highs. Shares of high-dividend paying companies in utilities and real estate were among the biggest losers.
"That is not to say that we won't see further falls in coming days, but in an environment where growth is good and earnings are expected to rise globally, there are decent underpinnings", said James Knightley, chief worldwide economist at ING. In this case, that was less than two weeks ago, when the Dow closed at a record high of 26,616. But higher wages could lead to higher inflation, creating new challenges for the Fed to manage, perhaps prompting it to raise rates more quickly.
The Dow Jones industrial average is up more than 300 points in early trading Friday, a day after it suffered its second 1,000-point drop in a week.
S&P 500 e-minis ESc1 were down 13.75 points, or 0.53 percent, with 1,173,713 contracts traded.
American employers are hiring at a healthy pace, with unemployment at a 17-year low of 4.1 percent.
Toronto's TSX index also felt the pressure, tumbling 271 points, closing at 15,334.81.
The stock market finished the day sharply higher, but only after another session of wild price swings. The April gold bullion contract was up US$4.40 to US$1,319.00 an ounce. That means a drop of 10 percent from a recent peak. It's down 181.13 points, or 6.6 per cent, for the week.
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