U.S. stock futures surged on Friday after the Federal Reserve stepped in with a half-point cut to one of its main interest rates.

The Fed cut its discount rate to 5.75% from 6.25%, saying it wanted to narrow the spread between the primary credit rate and the targeted federal funds rate.

Continuing doubts about the strength of credit markets resulted in the worst single-session decline in Japanese stocks in seven years on Friday.

Japan’s Nikkei 225 Stock Average slumped to close 5.4% lower at 15273.68, its lowest level in a year. Most Asian markets continued to fall Friday.

European stocks eased back from early gains Friday, with the United Kingdom’s FTSE 100 Index off 0.4% and Germany’s DAX Index down 0.6%.

In economic news, Canadian wholesale sales grew only slightly in June, as increased sales of “other products” were largely offset by a decrease in the automotive sector, Statistics Canada reported.

The Canadian dollar gained 0.48 of a cent to US93.48¢.

Today’s calendar also includes release of the preliminary University of Michigan consumer sentiment survey for August.

In earnings news, Hewlett-Packard said late Thursday that earnings for the third-fiscal quarter jumped 29%, thanks to strength in personal-computer sales along with a decline in prices for components such as memory chips. It also issued a slightly better-than-expected revenue forecast for the current period, which closes at the end of October.

Rival computer maker Dell said it will restate more than four years of financial results after “errors and irregularities” were discovered during a review of past accounting and reporting practices.

In M&A news, Borse Dubai tabled an unsolicited offer for Sweden’s OMX valued at US$4 billion in cash, trumping an offer from the Nasdaq Stock Market.

Crude-oil futures rose 59¢ to US$71.46 a barrel. Gold futures rose $3.70 to US$661.70 an ounce.

The Toronto stock market fell as much as 585 points on Thursday before a bank-led rebound recovered nearly two-thirds of those losses.

The S&P/TSX composite index closed down 200.06 points, or 1.5%, at 12,848.70, wiping out all the gains the index had logged so far this year. The index began the year at 12,908.39.

The TSX financials group was the session’s lone gainer, up 0.9%, while other sectors logged steep losses.

A record 708.05 million shares changed hands
in trading on Toronto Stock Exchange Thursday, eclipsing the previous record of 499.8 million set on July 12, 2007. There were 996,311 transactions, breaking the previous record of 707,853 set on Aug. 10, 2007.

The junior S&P/TSX Venture composite index plunged 217.02 points, or 8.16%, to 2,443.82..

In New York, the Dow industrials closed lower for a sixth day on fears that credit markets may break down and hurt the economy and profits,

But blue chip stocks recovered 300 points in the last 45 minutes of the day, and the broader benchmark S&P 500 clawed back into positive territory.

The Dow Jones industrial average declined 15.69 points, or 0.12%, to 12,845.78. But the S&P 500 was up 4.57 points, or 0.32%, at 1,411.27.

The Nasdaq composite index was down 7.76 points, or 0.32%, at 2,451.07.