Oct. 11--Credit-crunch worries continued to weigh on U.S. stock markets Friday, but the hemorrhaging evident for most of the week was contained. The Dow, however, was buffeted by wild gyrations amid frenzied trading.

The blue-chip index twice recovered from drops of 500 points or more: when it first opened and at 2 p.m. At one point the 30-stock index plummeted as much as 697 points, only to later rise 322 points. At the close of trading, the Dow was down 128 points, or about 1.5 percent, to close at 8,451.19, capping one of its worst weeks in history. It's down 1,874.19 points for the week and 36 percent lower than a year ago.

The broader indexes were mixed, but both were down dramatically for the year. The Standard & Poor's index of 500 stocks closed at 899.22, down 10.70 points Friday, polishing off its worst week since 1933, the height of the Great Depression. It is down 39 percent from a year ago. The tech-heavy Nasdaq composite of 5,000 stocks eked out a 4.39-point gain, rising to 1,649.51. Still, the index is down 38 percent from a year ago.

Trading was frenzied. Almost 3 billion shares changed hands on the New York Stock Exchange, more than twice the three-month daily average.

In a speech to the nation Friday morning, President George W. Bush summed up the root of the problem: Banks holding mortgage-backed assets have suffered "serious losses" and are reluctant to lend.

"As a result of these losses, many banks lack the capital or the confidence in each other to make new loans," he said. "In turn, our system of credit has frozen, which is keeping American businesses from financing their daily transactions and creating uncertainty throughout the economy."

The Federal Reserve has injected hundreds of billions of dollars into the credit market to coax banks into lending. This week, it made it even cheaper for banks to borrow that money, with an emergency cut in the federal funds rate to 1 percent, from 1.5 percent. That is the rate banks charge each over for overnight loans. And Friday, Treasury Secretary Henry Paulson announced that the U.S. government will buy direct equity stakes in ailing financial corporations, if necessary, something other countries engulfed in the global crises have done.

But none of those extraordinary moves made so far have budged U.S. banks from their restrictive monetary policies because of fears of not having enough money for their own capital needs and concerns about companies' ability to repay the loans.