The gains Thursday were a respite after three weeks of extremely volatile trading marked by steep losses.
But late in the day, the Shanghai Composite index erased its early losses to end up only 0.5 points at 2,603.80. Bond prices rose, sending yields lower, as investors seek less risky assets.
Meanwhile, Amazon.com Inc saw a drop of 9.6 percent.
NY trading overnight saw the Nasdaq composite with its hefty roster of tech stocks bear the brunt of the sell-off.
Stocks are opening broadly lower on Wall Street, a day after a massive surge, as a number of big companies reported disappointing results.
KEEPING SCORE: The S&P 500 fell 63 points, or 2.3 percent, to 2,677 as of 3:32 p.m.
Companies began reporting their results for the third quarter last week.
Yet, he said, "you can't look at it blindly and say earnings are turning the market around and we're all clear". The average was briefly down 539 points.
In New York trading overnight, the Nasdaq composite with its hefty roster of tech stocks bore the brunt of the sell-off, falling more than 10 per cent below its August peak, what Wall Street calls a "correction".
This caused the tech-heavy Nasdaq index to plummet by 4.4 per cent. The Dow and S&P 500 have almost erased their gains for the year.
Rising rates and the trade dispute could both impair economic growth, and some encouraging economic news helped stabilize markets.
"Overall, earnings results are good, but pockets of results, such as those in the Industrials sector, show the impact of tariffs and the slowdown in global trade", Draho said.
"There's still uncertainty facing equity investors", said Gary Pollack, managing director at Deutsche Bank Wealth Management. It rose 1.3 percent to $354.65 after the defense contractor's latest quarterly results topped analysts' forecasts. Intel, due to report earnings later this week, fell 4.7 percent.
But other large industrial companies in the Dow fell, including Caterpillar and 3M which dropped 5.6 per cent and 4.2 per cent, respectively. Hong Kong's Hang Seng index ended 1 per cent lower at 24,994.46 and Australia's S&P ASX 200 sank 2.8 per cent to 5,664.10.
U.S. gross domestic product growth slowed less than expected in the third quarter as a tariff-related drop in soybean exports was partially offset by the strongest consumer spending in almost four years and a surge in inventory investment.
US bond prices were little changed.
Bond prices fell. The yield on the 10-year Treasury note rose to 3.13 percent.
Benchmark U.S. crude rose 0.8 percent to $67.33 a barrel. Brent crude, used to price worldwide oils, slid 0.4 percent to $76.17 a barrel in London. Wholesale gasoline slipped 0.8 percent to $1.82 a gallon. Copper was little changed at $2.76 a pound.
All 11 major S&P sectors were in the red, with the defensive utilities, real estate and consumer staples indexes posting the smallest losses. Japan's Nikkei 225 index sank sharply on the open but leveled off, regaining some lost ground.
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