Wall Street stocks rally after morning of heavy losses

Wall Street stocks rallied in the afternoon to reverse steep early losses, sending the Dow Jones industrial average 330 points higher.

Even with the rebound, this was the worst week for the market in about two years.

Stocks struggled to stabilise much of the day as investors sent prices climbing, then slumping in unsteady trading a day after the market entered its first correction in two years.

The up-and-down swings followed a drop of 10% from the latest record highs set by major US indexes just two weeks ago.

At midday, the market was on pace for its worst weekly decline since October 2008, at the height of the financial crisis.

The Dow briefly sank 500 points in afternoon trading after surging more than 349 points earlier in the day.

At midday, the market was on pace for its worst weekly decline since October 2008. Credit: PA

The blue chip average suffered its second 1,000-point drop in a week on Thursday.

The Standard & Poor's 500 index, the benchmark for many index funds, also wavered between gains and losses.

As of Thursday, some 2.49 trillion dollars in value had vanished from the index since its most recent peak on January 26, according to S&P Dow Jones Indices.

"Equities have traded in a roller coaster fashion all week and today is no exception," said Terry Sandven, chief equity strategist at US Bank Wealth Management.

"There's a fair amount of volatility in the market, and our belief is the volatility is leaving investors riddled with stress and uncertainty, which is likely to continue."