For investors in U.S. stocks, the day ended on a much brighter note than it began.  

The Dow Jones industrials fell as much as 465 points in the first half hour of the trading day, but they clawed their way back as the day wore on. The Dow closed down 128 points, or just over 1 percent. Technology stocks were hit harder, as the Nasdaq shed 2 percent of its value.

Investors around the globe saw today's modest sell-off as good news, after Asian and European markets tumbled in the past two days over worries that an American recession would drag down the world economy. (See this slideshow for more on the turbulence abroad.)

The Dow's late-day recovery also should have pleased Ben Bernanke. Early this morniing, the Fed unexpectedly cut short-term interest rates by three-quarters of a point, to 3.5 percent.

Investors around the world are increasingly worried that a long recession in the United States—the world's biggest consumer—and a continued worldwide crunch in credit would slow their own economies and possibly cause a global recession. That is particularly true for the fast-growing economies of China, India, and Brazil, which depend on the United States market for their goods.

"The U.S.' problems are stretching out globally," Alan Ruskin, chief international strategist at investment firm RBS Greenwich Capital, told the Los Angeles Times. "Clearly these markets are very vulnerable, plainly nervous—and uncertainty rules."

The market sell-off this week has dashed hopes that economies in Asia and Europe were not as dependent on the United States as in years past and could withstand an American recession—a point of view known as decoupling.

Still, some saw the selling as being fueled more by the panic of the moment rather a substantial shift in the economic outlook.

"I don't think it's warranted by the fundamentals," Edward Yardeni, an independent strategist, told the New York Times. "The resilience of the global economy in the face of a credit crunch has been impressive."