The Dow Jones Industrial Average plunged 117 points (0.91 per cent) to 12,749.78 in the first two minutes of trade and the tech-dominant Nasdaq composite dropped 19.43 points (0.79 per cent) to 2,431.81.

The broad-market Standard & Poor's 500 index fell 8.85 points (0.63 per cent) to 1,388.83.

On Thursday, stocks closed modestly higher on upbeat news from retailers that eclipsed oil prices' relentless climb to new highs as investors focused on the prospects of an economic recovery.

The Dow rose 0.41 per cent, the Nasdaq added 0.52 per cent and the S&P 500 increased 0.37 per cent.

American International Group reported after the market close on Thursday a first-quarter net loss of 7.81 billion dollars and said it was raising 12.5 billion dollars in capital.

'AIG's news has prompted downgrades from the credit rating agencies and has renewed concerns about the longevity of the credit market mess,' said Briefing.com analyst Patrick O'Hare.

The Dow component is expected to 'weigh heavily' on the broader market initially as other financial companies trade lower in response, O'Hare said. -- AFP