INSTANT VIEW: Stocks tank on recession fears

NEW YORK (Reuters) - U.S. stocks fell sharply at the open of trading on Friday as recession fears grip world markets.

The Dow Jones industrial average was down 398.08 points, or 4.58 percent, at 8,293.17. The Standard & Poor's 500 Index was down 42.09 points, or 4.63 percent, at 866.02. The Nasdaq Composite Index was down 103.01 points, or 6.42 percent, at 1,500.90.

Stock markets were in freefall around the world as panicked investors moved to liquidate risky positions. Japan's Nikkei index ended down 9.6 percent and European shares lost 8 percent.

The White House on Friday said financial markets were trying to digest a lot of information about the economy and government policy and that it would take time for conditions to settle.

MARKET REACTION * Benchmark 10-year Treasury notes' price were up 29/32 at 103-14/32, well below their early high of 104-8/32. * Gold falls 5 pct, silver nearly 10 pct, platinum 6 pct * Dollar hits new 2-year high vs the euro * Oil below $64 a barrel to new 16-month low

COMMENTS:

MARC PADO, U.S. MARKET STRATEGIST, CANTOR FITZGERALD & CO.

"In 1987, the crash was precipitated by these huge waves that would come in every hour. People would just see the orders and the futures. That's kind of the mentality we have now. The good news is that it's often short-lived and it creates huge opportunities -- if there is anyone left with money."

"This has been very clear over the last two weeks. It's not about the fundamentals or the technicals. It's about these trades and when they're forced to liquidate. Asia last night was a currency trade that was unwinding, they had to sell whatever they had to sell."

"Where you see that the hedge funds were involved is where you're seeing the greatest amount of damage. Unfortunately for the average person it becomes too scary to enter the water, even though these prices -- a year from now -- are at bargain basement prices."

BRIAN YELVINGTON, SENIOR STRATEGIST, CREDITSIGHTS, NEW YORK:

"If we look at credit spreads, they were out quite a bit at record wides and we're continuing that trend."

"People are finally realizing that the financial mess is going to work its way into the broader economy."

"It's going to affect consumption and production for several quarters, and the fixed-income markets figured this out months ago."

CARL BIRKELBACH, CHAIRMAN AND CEO OF BIRKELBACK MANAGEMENT IN CHICAGO

"I think this is a historic bottom here. It may be known as "Bloody Friday" or "Bloody Monday," depending on how long it lasts. I think this will become an gigantic buying opportunity. There's a downstream effect the credit crisis is having on businesses and Main Street. I think that's overdone, and I think that's sometime the way bear markets end. This is certainly a bear market - stocks worldwide have gone down 50-60 percent.

"It'll take a lot longer to go up than it took to get down. Selection and timing are going to replace buy and hold.

KEITH WIRTZ, PRESIDENT AND CHIEF INVESTMENT OFFICER OF FIFTH THIRD ASSET MANAGEMENT:

"You have the hedge fund audience preparing for redemption pressure and they are unwinding"

"The hedge people need to raise liquidity. The economics of their sale may or may not be defendable. They just need cash. They don't want to be exposed. There is fear in this marketplace, there's fear to hedge funds redemptions, there is fear of people just needing to get away from risk"

"We had a technical low about two weeks ago ... we need to retest that low once or twice before we get a market with conviction to move higher, and I think we're now testing those lows"

OMER ESINER, SENIOR MARKET ANALYST, RUESCH INTERNATIONAL, WASHINGTON

"Sentiment overall is extremely nervous. Sentiment toward the dollar is rather positive given the relative safety of dollar assets at this point of time. The main theme has been a flight into dollars, a flight into yen and really a broadbased abandonment of nearly every other currency.

"As trading gets underway and we're seeing the Dow extend its losses, so I would probably bet on a further decline in dollar/yen probably toward the lower end of its ranges."

KINGMAN PENNIMAN, PRESIDENT, HIGH-YIELD RESEARCH FIRM KDP INVESTMENT ADVISORS, MONTPELIER VERMONT:

"A lot of this is the freezing up of the financial system and lack of liquidity and lack of funding. Obviously we're all watching the effect of the punishing deleveraging that's taking place....That's why everything is being magnified -- because you have forced selling and no buyers.

"We're going to overshoot, but then we finally have to come to grips with the fact that we are in a recession and there is going to be a credit crunch and what are we going to do about it."

SHAUN OSBORNE, SENIOR CURRENCY STRATEGIST, TD SECURITIES, TORONTO

"The yen's rise may be a bit of a relief rally because the Dow didn't fall 800 points straight away, but we haven't traded for a very long yet. I can't imagine that in this environment you'll see sustained yen selling. People are looking for a sustained move lower for dollar-yen below 90. We are still seeing huge deleveraging and forced liquidations."

BILL O'NEILL, MANAGING PARTNER, LOGIC ADVISORS, NEW JERSEY

"It's forced liquidation, and this money flow has been hitting every commodity."

"Even if you have good assets that you would like to hold, such as some commodities perhaps, you are being forced to sell because of the liquidation pressure and margin calls, etc, along with the fact that the dollar is rallying."

"You look at these markets, whether it is agricultural or industrial commodities -- we are not trading on fundamentals, we are trading on money flow."

TOM BENTZ, SENIOR OIL ANALYST, BNP PARIBAS, NY, NY

"The financial market meltdown is dragging everything lower, regardless of OPEC cuts."

CHRIS JARVIS, SENIOR ANALYST, CAPROCK RISK MANAGEMENT, HAMPTON FALLS, NEW HAMPSHIRE:

"With the short-term credit markets finally starting to thaw, investors are now focused on the world markets and long-term ramifications of the credit crisis globally. Given the news from corporate earnings this week out of the U.S. and around the globe, investors are now trying to ascertain how deep the global recession will be and the impact on future growth."

"With near zero visibility for the degree of the global slow-down, major deleveraging is taking place, leading to risk-adverse behavior and investors continue to be whipsawed, generating unprecedented volatility. However, that said, it's usually darkest right before dawn, which means today's open could be the final capitulation we need to finally right the ship and build confidence long-term, leading to market stabilization."

PETER JANKOVSKIS, A CHIEF INVESTMENT OFFICER, OAKBROOK INVESTMENTS LLC, LISLE, ILLINOIS

"The biggest thing to see is when does it stop, when does it start to form a bottom and come back up because obviously the futures were predicting we'd be down in the neighborhood of 7, 8 percent.

"At the moment, we're not quite there. I frankly would have expected kind of more of an instantaneous drop. I'm looking at a lot of the shares that we hold in our select equity portfolio, which tend to be more defensive names, many of them are kind of hanging in right here at what the market's at, down 3 to 4 percent.

"It may be that this is going to be more of an issue for the overseas markets. We've obviously priced in the fact that we're going to see a recession here in the U.S. and I think perhaps some of the foreign markets hadn't done that yet. I would say today, if we can close the day with the market down say 3 percent or less, we will have had a very good day."

(Reporting by U.S. markets team; Compiled by Edward Tobin)