NEW YORK (CNNfn) - Russia's economic convulsions caught up with Wall Street in midday trading Friday, sending stocks down again, a day after the market suffered its worst one-day decline so far this year.
Looming concerns that the former superpower's malaise likely will spread to other markets in the world suffocated an early rally in the U.S. stock market and led investors to the exits. Many on Wall Street are fearful of going into the weekend with large positions in the stock market, because of the unpredictability of what will happen next in Moscow.
The Kremlin struggled to regain composure and steadfastly denied rumors President Boris Yeltsin's days in office are numbered. True to his taste for sudden swift dismissals, Friday Yeltsin fired Anatoly Chubais, his chief negotiator with the International Monetary Fund and other international creditors.
Meanwhile, some of these creditors, Germany, Britain, France and Italy, offered Moscow moral support, but no money as Russia struggles to pull itself out of a self-created financial abyss.
Shortly before 11:30 a.m. the Dow Jones industrial average was 110.19 points, or 1.2 percent, lower at 8,055.80. On the New York Stock Exchange, advances trailed declines 803 to 1,983 as trading volume reached 328 million shares.
The Nasdaq Composite fell 53.12, or 3 percent, to 1,633.29 and the S&P 500 index slid 16.88, or 1.5 percent, to 1,025.71. The Russell 2000 index of small cap stocks shed 6.27, or 1.7 percent, to 359.83.
The bond market trimmed its early losses, as stocks resumed their declines. The benchmark 30-year Treasury bond was off 1/32 of a point in price for a yield of 5.34 percent.
The dollar traded mixed. It rose against the Japanese yen after the Tokyo stock market slid to 12-year lows and traders remained edgy about the prospects for economic recovery in Japan. The dollar tumbled against the German mark after Russian markets recovered slightly overnight and European stocks followed suit, bouncing off their session lows.
Short-lived recovery
In the stock market, banking issues, which suffered some of the heavies losses in Thursday's blood bath, attracted buyers at the start of the session. But investors were still jittery about the sector, as exposure to international currencies and debt securities still are likely to hurt earnings over the near term. This nervousness showed as the trading session progressed, and financial stocks once again took a turn for the worse.
Citicorp (CCI) tumbled 4 to 118 and Chase Manhattan (CMB) fell 1-3/4 to 56-3/8. Among Dow components, J.P. Morgan (JOM) dropped 3-11/16 to 101-1/16, American Express (AXP) lost 2 to 89, and Travelers (TRV) was off 2-5/8 at 47-7/8.
The technology sector also suffered. Earnings of technology heavyweights also depend to a degree on revenues from Asia and other overseas markets and have suffered in the past few quarters as a global economic slowdown has taken hold.
In early trading, shares of Dell (DELL) fell 8-1/16 to 117, Intel (INTC) was off 3-1/8 at 76-5/8, and Microsoft (MSFT) lost 3-1/2 to 105-3/4. Dow member IBM (IBM) was down 3-1/2 at 121-3/4.
Also in the tech sector, shares of Gateway (GTW) fell 3-1/4 to 52-1/8 after the made-to-order computer manufacturer said it is cutting prices for its Solo line notebook computers by up to 6 percent.
And the stock of Computer Learning Centers (CLCX) plunged 7-15/16, or more than 59 percent, to 5-7/16 after the company issued a profit warning, saying it expects earnings in its fiscal second quarter to come in well below Wall Street expectations.
Finally, telecommunications equipment maker Tellabs (TLAB) saw its stock shed 8-3/4, or more than 15 percent, to 49-1/16 after saying it still plans to buy rival CIENA (CIEN), although for a much smaller sum. Tellabs said it now will pay $4.7 billion for CIENA, more than a third less than the previous price Tellabs was willing to pay. The reason: a sharp drop in CIENA's shares over the past week, largely due to the loss of one of company's biggest potential customers, AT&T (T). CIENA's shares rallied 3-15/16 to 34-3/4. 
-- by staff writer Malina Poshtova Zang
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