NEW YORK (CNNfn) - The bloodletting continued on Wall Street Friday, wrapping the stock market's worst week in history as investors extended their painful exodus amid growing fears that stormy days lie ahead for the global economy.
The Dow Jones industrial average lost 114.31 points, or 1.4 percent, to close at 8,051.68. Taking a loss of 481.97 points this week, its biggest weekly decline ever, the blue chip index all but erased its gains for the entire year. The Dow is now up only 1.81 percent since Jan. 1.
On the New York Stock Exchange, declines trounced advances 2,191 to 918 as trading volume reached 848 million shares.
The Nasdaq Composite fell 46.73, or 2.8 percent, to 1,639.68 and the S&P 500 index slid 15.34, or 1.5 percent, to 1,027.25. The Nasdaq lost 157.93 points this week, the largest weekly point decline in its history. The S&P 500 lost 53.93 points. The Nasdaq still has gains of 4.41 percent for the year and the S&P 500 is up 5.85 percent.
The Russell 2000 index of small cap stocks shed 7.56 points, or 2.1 percent, to 358.54. With a loss of 9.38 percent this week, the Russell 2000 is now down 17.96 percent for the year.
Russia's economic wretchedness once again blew investors' confidence in the market away.
Looming concerns that the former superpower's malaise likely will spread to other markets in the world suffocated an early rally in U.S. stocks and led investors to the exits. Many on Wall Street were 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, Yeltsin fired Anatoly Chubais, his chief negotiator with the International Monetary Fund and other international creditors. Then, in a taped interview with Russian television, Yeltsin said he would serve out his full term until the year 2000 and has no plans to dismiss the lower house of the Russian parliament, the Duma.
Meanwhile, acting Prime Minister Viktor Chernomyrdin and the Communist-dominated Duma reached a consensus on a political strategy to rescue the country, although no details of the agreement were released. And Yeltsin offered to give the prime minister and the Duma more power to choose who enters Russia's next government.
Some of the country's biggest creditors, Germany, Britain, France and Italy, offered Moscow moral support but no money in Russia's struggle to pull itself out of a self-created financial abyss.
Back on Wall Street, despite three days of heavy pounding, words of comfort came from one of the market's most listened-to bulls. Goldman Sachs stock strategist Abby Joseph Cohen, in a conference call with investors this morning, said she views the market's drop as a buying opportunity. Sticking to her forecast for this year of 9,300 for the Dow and 1,150 for the S&P 500, Cohen said she still favors financial and technology stocks.
Allan Hoffman, stock strategist with Value Line Asset Management, said he expects the selling to dry up soon.
"We are close to the bottom," he said. (304K WAV) or (304K AIFF)
The bond market closed lower, nervously watching stocks. The benchmark 30-year Treasury bond lost 3/32 of a point in price, for a yield of 5.36 percent. Some investors sold Treasury securities to cover losses in other financial markets.
The dollar fell against the Japanese yen after the Tokyo stock market slid to 12-year lows and stocks on Wall Street met sellers. The dollar also tumbled against the German mark after Russian markets recovered slightly overnight and European stocks followed suit, bouncing off their session lows.
A nervous breakdown?
In the stock market, banking issues, which suffered some of the heaviest losses in Thursday's bloodbath, attracted buyers at the start of the session. But investors were still jittery about the sector, as exposure to international currencies and debt securities were feared 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 4-7/8 to 117-1/8 and Chase Manhattan (CMB) fell 1-5/8 to 56-1/2. Among Dow components, J.P. Morgan (JPM) dropped 7 to 97-3/4, American Express (AXP) lost 3-1/2 to 87-1/2, and Travelers (TRV) finished off 2 at 48-1/2.
Following the footsteps of a similar announcement Thursday by Republic New York (RNB), BankAmerica (BAC) said Friday it had accumulated trading losses of $220 million so far this quarter, mainly from Russia. The stock fell 4-1/8 to 69-5/8.
Brokerage stocks, also badly bruised in Thursday's selling disaster, continued their downward spiral. Morgan Stanley Dean Witter (MWD) dropped 4-5/16 to 65-1/4, Lehman Brothers (LEH) fell 4-3/4 to 45-11/16, and Merrill Lynch (MER) lost 4-13/16 to 73-1/2.
The technology sector suffered as well. Earnings of technology heavyweights also depend to a degree on revenues from Asia and other overseas markets and have been hit in the past few quarters as a global economic slowdown took hold.
Shares of Dell (DELL) fell 6-5/16 to 118-3/4, Intel (INTC) closed off 2-3/4 at 77, and Microsoft (MSFT) lost 4 to 105-1/4. Dow member IBM (IBM) finished down 2-11/16 at 122-9/16.
Also in the tech sector, shares of Gateway (GTW) fell 2 to 53-3/8 after the made-to-order computer manufacturer said it is cutting prices for its Solo line of notebook computers by up to 6 percent.
And the stock of Computer Learning Centers (CLCX) plunged 7-13/16, or more than 55 percent, to 5-31/32 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 8-13/16, or more than 15 percent, to 49 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, less than two-thirds of 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 the company's biggest potential customers, AT&T (T). CIENA's shares rallied 4-1/2, or more than 14 percent, to 35-5/16.
(Click here for a look at today's CNNfn market movers.) 
-- by staff writer Malina Poshtova Zang
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