Some Asian markets had been at record levels

The Dow Jones index, which fell earlier on Friday after Thursday's 2.6% drop, rose after strong employment data for October, edging up 0.20% at 13,595.10.

The Nasdaq added 0.56% to end at 2,810.38, while Standard & Poor's 500 Index gained 0.08% at 1,509.65.

But European stocks ended lower - the FTSE 100 lost 0.8%, France's Cac 40 lost 0.2% and Germany's Dax shed 0.4%.

Earlier, Asian shares took a hammering with Japan's Nikkei index losing 2.1%, while Hong Kong's Hang Seng fell 3.3%.

Analysts said US figures released on Friday indicated that the economy was weathering woes in both the housing and credit markets.

Figures from the US Labor Department showed that 166,000 jobs had been created in October, while the Commerce Department said new orders at US factories unexpectedly rose by 0.2% in September, boosted by gains in machinery and computer orders.

Nonetheless market jitters remained about the state of the economy, sending finance stocks lower.

Investment bank Merrill Lynch saw its stock decline after the Wall Street Journal said the firm sought to postpone the impact of large investment losses by shifting them to hedge funds.

Merrill said that it had no knowledge of any inappropriate transactions. Its shares ended 7.9% down by close of trade.

Oil nerves

European and Asian shares had earlier fallen - largely on the back of Thursday's Wall Street losses.

There were also concerns that US interest rates might not drop further after the Federal Reserve warned of inflationary risks after its latest cut.

The price of oil, which climbed above $96 a barrel on Thursday and was trading at about $93.50 on Friday, had also made investors nervous, analysts said.

Elsewhere, shares in Shanghai shed 2.3%, Australian stocks dropped 1.9% and Singapore's leading index fell back 2.5%.

The BBC Global 30, which tracks stocks worldwide, slipped 0.9%, having fallen 1.6% on Thursday.