Futures pointed to a weaker open on Wall Street Friday after a report showed new home construction at its lowest level in 17 years.
This follows Thursday's bounce back, when the Dow finished with a 401.35-point gain after swinging in a range twice that. Volatility is expected to continue as investors still wonder whether the worst of the financial crisis is still to come.
Housing starts fell 6.3 percentin September to an annual rate of 817,000, much lower than expected and the lowest pace in 17 years. Building permits, a gauge of future-building activity, dropped 8.3 percent to a 786,000 annual rate.
Honeywell reported a quarterly profit Friday that slightly beat market expectations, saying it earned 97 cents a share in the third quarter, up from 81 cents a share in the same quarter a year ago. Analysts surveyed by Reuters predicted a profit of 95 cents a share.
Asian stocks closed mixed on recession fears, while European shares were cautiously higher mid-morning, off the session's highs.
The troubled housing and credit markets are hurting the broader U.S. economy, Boston Federal Reserve President Eric Rosengren said, adding that a proactive policy response that includes direct outreach to homeowners was needed.
As the economy worsens and unemployment rises, more Americans are having trouble paying off their credit card balances. That pushed up losses for credit card issuers, forcing them to tighten standards, which puts a further squeeze on cash-strapped consumers, analysts told CNBC.com.
Despite the credit freeze, merger talks between General Motors and privately held Chrysler are moving at a faster pace as potential lenders have thrown their support behind a deal between the two U.S.-based automakers, CNBC has learned.
French car maker Renault denied reports that it was in talks with Cerberus on possibly buying back the Jeep brand, which Renault sold to Chrysler along with American Motors in 1987.
Exceptional results from Google , which reported a profit that easily outpaced analysts' forecasts, did little to dispel the gloom in the markets, and Nasdaq futures pointed lower.
Excluding one-time items, Google earned $4.92 a share in the third quarter, on a top line of $4.04 billion. Analysts who follow the Internet search and advertising giant were calling for earnings of $4.75 a share on revenue of $4.053 billion.
And Warren Buffett wants the world to know that it's time to get greedy right now, as fear sends stock prices plunging across the globe.