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NEW YORK - Stocks opened higher Friday, but then pared gains and were in negative territory in midday trading.

The Dow Jones industrial average was down 0.2%, while the broader Standard & Poor's 500 index was down 0.5^%. The tech-heavy Nasdaq composite index was down 0.9%, dragged lower by a weak-earnings plunge in Oracle shares.

Pulling stocks lower: another jump in bond yields. The bellwether 10-year Treasury note jumped to 2.5%, highest since August 2011.

Investors are uneasy after the market's biggest down day of the year Thursday. The Dow has tumbled more than 550 points in the two trading days since Federal Reserve Chairman Ben Bernanke signaled that the Fed was on the verge of transitioning to a less-friendly monetary policy.

The market is looking to stabilize after its worst two-day drop in 19 months caused by uncertainty and angst in response to the Fed's plans to start reducing its massive bond-buying program later this year.

"After a tumultuous week, the focus will be on whether the U.S. data will justify the Fed tapering," Rob Subbaraman, an economist at Nomura told clients in a research note.

Investors in the U.S. and around the globe are still adjusting to the idea of less market support - or "the end of free money" -- from central bankers, including the Fed, says Ron Florance, managing director of investment strategy at Wells Fargo Wealth Management.

And that could mean some bumpy days ahead.

"The Fed's action represents the continuing transition that is occurring in the global economy following the financial downturn and the recovery period that has followed," Florance says. "We expect financial markets to respond with a measure of volatility as the 'normalization' process unfolds."

After a lower opening Friday, the Nikkei 225 index in Tokyo reversed course to rise 1.7% at 13,230.13. Hong Kong's Hang Seng index dropped 0.7% to 20,236.43, while South Korea's KOSPI index shed 1.5% to 1,822.83.

"Asia has benefited from U.S. capital inflows, partly in relation to QE. It has been force-fed with steroids, and now that the steroids are going to be pulled back, what will happen is a period of transitional volatility that can continue through summer," said Mitul Kotecha, analyst with Credit Agricole CIB.

Markets in Europe were trading modestly higher Friday after experiencing sharp falls in Thursday's session. The Stoxx Europe 600 index rose almost 0.5% to 285.

Benchmark oil for August delivery dropped 70 cents to $93.60 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $2.84 to close at $95.40 on the Nymex on Thursday.

Contributing: The Associated Press

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