After a mixed opening, the Dow Jones Industrial Average fell 57.63 points (0.43 percent) to 13,415.94 at 1340 GMT, a day after a 300-plus point decline for blue chips in the second worst session of the year.

The tech-heavy Nasdaq composite fell 14.45 points (0.56 percent) to 2,584.89 while the broad-market StandardPoor's 500 index shed 8.26 points (0.56 percent) to 1,447.40.

Wall Street was still licking its wounds from Thursday's massacre amid concern over rising borrowing costs, and also mulled a report showing the economy grew at a better-than-expected 3.4 percent rate in the second quarter.

"The aversion to risk is as strong this morning as it was yesterday," said Hugh Johnson, chairman of Johnson Illington Advisors. "Most buyers are stepping back and just watching the market open. They'll make their decisions on whether to step in and start to buy" later in the day.

Al Goldman at AG Edwards said, however, that the sharp selloff Thursday was the result of "old news -- credit problems, subprime loans, selected earnings disappointments and oil prices."

Goldman said the market "was vulnerable for a correction after its big rally the past three weeks" and said he believed the recovery late in the session Thursday "will pick up steam today."

"Today, ideal action would be a sharp early down, test yesterday's lows at Dow 13,330, hold, then rally. We look for an up session by the close," he said.