* Fears of Greece contagion rattle markets
* Trading glitch may have contributed to Thursday's tumble
* Index gains for 2010 erased
* Dow down 1.3 pct, S&P off 1.5 pct, Nasdaq off 2.3 pct
* For up-to-the-minute market news see []
(Updates to close)
By Angela Moon
NEW YORK, May 7 (Reuters) - U.S. stocks turned negative for
the year on Friday on fears of another credit crisis stemming
from Greece's souring finances and lingering questions about
what triggered the previous session's dramatic plunge.
The major stock indexes finished Friday's volatile session
from 1 percent to 2 percent lower.
The weekly declines for the Dow and the S&P 500 were the
steepest since March 2009 when the market hit a 12-year low.
The Nasdaq had its largest weekly drop since November 2008.
Wall Street's "fear gauge" -- the CBOE volatility index
<.VIX> -- rose 25 percent, while the volume of shares traded
was the second highest this year.
"Europe's debt crisis is a big issue that won't go away any
time soon. But with what happened yesterday, investors have
grown more concerned that the environment just isn't safe,
period," said Stephen Massocca, managing director at Wedbush
Morgan in San Francisco.
Governments around the world tried to calm markets after
fears about Greece's debt crisis spread further around the
globe. The cost of protecting European bank debt against
default reached levels not seen since the height of 2009's
economic crisis. For details, see []
The Dow Jones industrial average <> fell 139.89 points,
or 1.33 percent, to 10,380.43. The Standard & Poor's 500 Index
<.SPX> was down 17.27 points, or 1.53 percent, at 1,110.88. The
Nasdaq Composite Index <> finished 54 points lower, or
2.33 percent, at 2,265.64.
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Graphic of stock action http://link.reuters.com/wat23k
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For the week, the Dow was off 5.7 percent, the S&P 500 was
down 6.4 percent and the Nasdaq dipped 8 percent.
The Nasdaq fared worse as technology stocks led the broader
market lower. Apple Inc <AAPL.O> ended down 4.2 percent to
$235.86 and Intel Corp <INTC.O> dipped 0.9 percent to $21.31.
LINGERING QUESTIONS
Thursday's sell-off drove the Dow average down nearly 1,000
points -- its biggest-ever intraday point drop.
The fall may have been exacerbated by erroneous trades that
showed some shares briefly fell to nearly zero in value. The
Nasdaq and other exchanges said they would cancel erroneous
trades. For a partial list of canceled trades see
[].
The U.S. Securities and Exchange Commission held urgent
discussions with other regulators to try to shed light on the
causes of Thursday's plunge. []
Trades that took place during the worst of Thursday's drop
will be canceled for more than 250 stocks, Nasdaq OMX said,
adding to a long list of "busted" transactions on NYSE
Euronext's Arca and other exchanges and trading venues.
The uncertainty around the cancellations could have
heightened the day's price swings as investors examined their
holdings.
"It could add to volatility because you have to unwind all
of that," said Kurt Brunner, portfolio manager at Swarthmore
Group in Philadelphia.
The volatility index ended up 24.9 percent at 40.95 after
rising as high as 42.15 earlier in the day, its highest since
April 2009.
Stocks gained some ground after data showed U.S. non-farm
payrolls grew at the fastest pace in four years in April as
private sector employers ramped up hiring. []
About 17.6 billion shares traded on the New York Stock
Exchange, the American Stock Exchange and Nasdaq, compared with
last year's estimated daily average of 9.65 billion.
Declining stocks outnumbered advancing ones on the NYSE by
a ratio of about 22 to 9, while on the Nasdaq, about four
stocks fell for every one that rose.
(Additional reporting by Leah Schnurr; Editing by Kenneth
Barry)
