NEW YORK — Wall Street closed out a difficult week with a mixed finish Friday after the Federal Reserve injected billions of dollars into the banking system to calm markets torn by worries about evaporating credit. The Dow Jones industrials, down more than 200 points during the session, ended with just a 31-point deficit and managed to post a gain for the week.

The stock market, which has been gyrating for weeks over fears that credit is drying up, pared its losses after the Fed's injections of cash and following morning comments from the central bank that it would do all it can to "facilitate the orderly functioning of financial markets." The steep declines seen at times during the session and persistent volatility, however, showed the depths of fear that had some investors yanking money out of stocks.

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FED ACTS TO PLACATE CREDIT TURMOIL

WASHINGTON — The Federal Reserve, trying to calm turmoil on Wall Street, announced Friday that it will pump as much money as needed into the U.S. financial system to help overcome the ill effects of a spreading credit crunch.

The Fed, in a short statement, said it will provide "reserves as necessary" to help the markets safely make their way. The central bank did not provide details but said it would do all it can to "facilitate the orderly functioning of financial markets."

The Fed pushed $38 billion in temporary reserves into the system Friday, on top of a similar move the day before.

Financial markets in the United States and around the globe have been shaken by fears about spreading credit problems that started with home mortgages for those with tarnished credit histories. Investors are worried that these problems will infect the larger financial system and possibly hurt the U.S. economy.

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CENTRAL BANKS INJECT BILLIONS TO CALM MARKETS

FRANKFURT, Germany — Central banks around the world injected more cash into the international banking system Friday as problems that began with U.S. subprime mortgages rattle the global economy.

The ECB injected a further 61 billion euros ($83.8 billion) Friday morning, while the U.S. Federal Reserve later announced a three-day repurchase agreement to inject liquidity into the market.

The Fed said it would accept $19 billion in mortgage-backed securities after its Fed Funds rate, the rate that banks charge each other for overnight loans, ticked above 6 percent — well above the Fed's target of 5.25 percent.

Later, the U.S. central bank said it would pump as much money as needed into the U.S. financial system to help overcome the effects of a spreading credit crunch.

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WORLD STOCKS PLUNGE ON CREDIT FEARS

LONDON — Stock markets plunged worldwide Friday as turmoil from the U.S. mortgage crisis rippled across the globe.

Stock markets in Europe tumbled, unappeased by the European Central Bank's decision to inject another 61 billion euros ($83.9 billion) into the banking system Friday, a day after it provided nearly 95 billion euros ($130.8 billion), the bank's biggest infusion ever.

London's FTSE 100 dropped 3.7 percent to 6,038.30, the CAC-40 in Paris fell 3.1 percent to 5,448.63 and Germany's DAX index was down 1.5 percent to 7,343.26.

In Asia, the Nikkei 225 index dropped 2.4 percent to close at 16,764.09 points on the Tokyo Stock Exchange. The broader Topix index of all shares on the exchange's first section sank 3 percent.

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SEC PROBES BOOKS OF WALL STREET FIRMS

WASHINGTON — The Securities and Exchange Commission is examining major Wall Street banks to determine their vulnerability to home-loan defaults.

Two people familiar with the accounting inquiry described the examination as a routine part of the SEC's oversight authority and said it involved Goldman Sachs Group Inc., Merrill Lynch & Co. and several rival investment banks. The people declined to be identified by name because the inquiry has not been publicly disclosed.

The Wall Street Journal reported the SEC's probe on Friday.

Trouble in the U.S. mortgage market, and a related credit crunch, has rippled across the globe. French bank BNP Paribas on Thursday suspended three securities funds valued at $2.75 billion, saying it could not value them accurately because of problems in the U.S. mortgage market.

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ENERGY FUTURES RECOVER ON NEWS OF STORM

NEW YORK — Energy futures rebounded from earlier lows on Friday as traders bought on news that a tropical storm is forming in the Atlantic Ocean and a report of a refinery problem.

Forecasts show the disturbance has the potential to develop into a tropical storm and strike the Gulf of Mexico within 2 weeks, said Addison Armstrong, an analyst at TFS Energy Futures LLC in Stamford, Conn.

The news injected some buying into a market that has been dominated by selling lately. Still, the new "storm premium" was moderate as the same credit and liquidity concerns roiling equity markets continued to weigh against storm forecasts and a report from an international watchdog agency that predicted tight supplies of oil amid growing demand over the next two years.

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FEDERAL DEFICIT DOWN FROM LAST YEAR

WASHINGTON — The federal deficit so far this budget year is running sharply lower, driven by record revenues pouring into government coffers.

The Treasury Department reported on Friday that the government produced a deficit of $157.3 billion for the the budget year that began last Oct. 1. That's a substantial improvement from the red ink figure of $239.6 billion produced for the corresponding 10-month period last year.

The lower year-to-date deficit was the result of a record of $2.12 trillion in revenues. Spending, however, was higher — $2.27 trillion, which also marked an all-time high.

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CHINA'S TRADE SURPLUS UP LAST MONTH

BEIJING — China's trade surplus soared 67 percent in July from a year ago to its second-highest monthly level on record, according to data reported Friday, amid pressure by U.S. lawmakers to sanction Beijing over trade and currency disputes.

July's surplus totaled $24.4 billion, the Chinese customs agency reported. That beat every previous month except June's all-time high of $26.9 billion.

Analysts had expected the surplus to ease in July after exporters rushed to ship goods in earlier months to beat changes in tax policy meant to narrow China's yawning trade gap.

The surplus grew despite recalls and warnings targeting faulty or tainted Chinese goods ranging from toothpaste to tires to seafood in the United States and other countries.

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GANNETT SEEKS TO CURB SALE RUMORS

NEW YORK — Gannett's chairman moved to quash "unwarranted" speculation that the company would be the next newspaper publisher for sale, telling employees in a company-wide Friday memo to "relax."

The memo came after Gannett Co., the largest company in the newspaper industry by circulation and market value, amended its bylaws and compensation plans in a way that would accelerate payment of retirement and deferred compensation to executives if the company is sold.

Gannett, which publishes USA Today and dozens of other newspapers including The Honolulu Advertiser, called the changes "routine," but the filing with the Securities and Exchange Commission came just one week after Rupert Murdoch's News Corp. sealed a $5 billion deal to buy Wall Street Journal publisher Dow Jones.

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COUNTRYWIDE SHARES SLIP

LOS ANGELES — Shares of Countrywide Financial Corp. slipped more than 2 percent Friday after the nation's largest mortgage lender said in a regulatory filing that "unprecedented disruptions" in debt markets could continue or worsen.

The stock fell 80 cents, or 2.79 percent, to close at $27.86. Shares opened the day by plunging more than 17 percent in premarket trading.

Shares of Washington Mutual Inc. also dropped more than 2 percent after the bank said in a filing with the Securities and Exchange Commission late Thursday that disruptions in the mortgage market could affect its liquidity.