Stocks turned higher after mixed economic news in the U.S. and China, and in the wake of a massive earthquake in Japan, which has sent Asian and European shares lower and rattled investor confidence already damaged by uncertainty in the Middle East.
The Dow Jones Industrial Average rose more than 20 points after plunging 228 points on Thursdayamid global concerns.
Among Dow components, Alcoa and 3M rose, while Verizon and AT&T fell.
The S&P 500 and the tech-heavy Nasdaq also gained. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell to just above 21.
"By and large the stock market has acted pretty well given the increasing headwinds its seen over the past few weeks," said Michael Sheldon, chief market strategist at RDM Financial Group. "Anytime the market is up 100 percent in the space of 24 months it’s certaintly reasonable to see some profit taking, and that seems to be what we’ve experienced in recent seessions."
The earthquake in Japan, which triggered a tsunamithat swept across the northern coast of Japan and has already hit the coast of Hawaii and Northern California. The news rattled stocks, currencies, and oil at the start of the session. Most Japanese ADRs traded lower, while the yen first fell sharply lower, then rose as traders remembered how strongly the yen performed after a quake in 1995. Currency Shares Japan Yen Trust rose slightly.(Read more: Massive Quake Whipsaws the Yen).
Investors were also focused on news of increased inflation in China, although the 4.9 percent rise was less than some had feared.
Shares of oil traded lowerFriday with a flight to safety expected following the earthquake that triggered a seven-meter tsunami that swept away cars and buildings. Prices also may be falling because a planned “Day of Rage” in Saudi Arabia Friday didn't appear to materalize. Protests are strictly forbidden in the country and it remains to be seen whether activists will succeed in taking their online protests to the street.
In Libya, forces loyal to Muammar Gaddafi entered the oil port of Ras Lanuf and are fighting for control of the town.
U.S. light sweet crude fell below $100 a barrel, while London Brent crude fell below $113.
According to Lipow Oil Associates, 18 percent of Japan's oil refinery capacity has shut down.
Companies are starting to assess the damage of the earthquake and flooding. Nissan reports there was damage at four of its plants while Toyota also stopped output at some of its plants.
In company news, Apple’s iPad2 goes on sale Friday, less than a year after the original iPad debut. The original iPad sold 300,000 units the first day, 500,000 the first week, and 1,000,000 in the first 28 days.
and Aeropostale will also be in the spotlight after shares in both companies fell in extended trading thurday following disappointing earnings reports.
Medtronic fell after the company said U.S. health regulators rejected a product it was developing to stimulate bone growth.
In U.S. economic news, the Thomson Reuters/University of Michigan reading on consumer sentiment fell to 68.2 in March, a five-month low,from a revised 77.5 in February.
Business inventories rose 0.9 percent in January, the highest level in two years, compared with a 1.1 percent gain in December, the Commerce Department reported. Business sales rose 2.0 percent in January, the fastest pace in nine months, compared with a 1.6 percent gain in December. Economists polled by Reuters had expected inventories to rise 0.7 percent.
Also retail sales rose 1.0 percent in February, up from 0.7 percent in January, the Commerce Department reported. The gain was the biggest since October, and in line with expectations of economists surveyed by Reuters.
In Europe, investors will turn their attention to a meeting of the leaders of the 17 countries that share the euro later on Friday. They will discuss the bloc’s response to violence in Libya as well as the debt crisis that has hit the region’s peripheral nations.