Bargain hunters have emerged and helped to turn around the battered local sharemarket.
Traders on the floor of the New York Stock Exchange Photo: AFP / Getty Images
The benchmark top-50 index opened close to 1 percent lower as it followed another big fall on Wall Street.
However, in the past hour the index has turned positive, gaining about half a percent.
The New Zealand market has fallen for nine days in a row, and yesterday's 330 point fall was one of the largest in its history.
However, investors look to be buying back into stocks such as A-2 Milk and power companies which were hard hit on Thursday.
Wall Street losses have been less severe than the brutal sell-off in the previous session, when US share markets suffered their sharpest one day fall in months on Wednesday. The New Zealand stock exchange followed the US and Asian markets down, with the NZX Top 50 last night closing 3.6 percent lower - its fifth largest loss.
The US stock market is reacting to the impact of trade tensions on corporate profits, Treasury yields at multi-year highs and, more recently, Hurricane Michael making landfall in Florida.
Energy and health stocks led the decline of nine of the S&P major sectors, while technology companies managed to post slight gains.
While stocks had coped well with rising trade tensions between the US and China over the past few months, the sharp rise in bond yields earlier this month, accompanied by hawkish comments from Federal Reserve officials, proved to be a tipping point that triggered the sell-off on Wall Street.
Still, the high-growth technology sector was up 0.4 percent, coming off a 4.8 percent slide on Wednesday. Gains were led by Microsoft, up 1.9 percent.
"The growth stocks, which are the path leaders, typically bounce from the bottom first," said Tom Plumb, portfolio manager of the Plumb Balanced Fund in Wisconsin.
Energy stocks fell 1.77 percent as oil prices hit two-week lows after an industry report showed U.S. crude inventories rose more than expected.
Foreign exchange specialist Derek Rankin told Morning Report it was possible traders were taking profits early amid uncertainty ahead of the US mid-term elections in three weeks.
"I wouldn't call it a crash, I'd call it a correction"- foreign exchange specialist Derek Rankin
At about midday New York time, the Dow Jones Industrial Average was down 0.54 percent, the S&P 500 had fallen 0.64 percent and the Nasdaq was 0.03 percent lower.
- Reuters / RNZ