Japan's triple disaster -- an earthquake and tsunami, which left 15,000 dead or missing, and the feared meltdown of multiple nuclear reactors -- drove the markets down from the beginning of the week.

And although economists said the overall impact on the global economy was likely to be small, the news pummelled shares across the world, helped by the steadily deteriorating situation at the Fukushima nuclear plant.

Nuclear power companies and nuclear technology vendors like General Electric plunged. Carmaker shares also lost ground on fears that the Japan disaster would interrupt the global supply chain.

Insurance shares also sank on the hits they would take from Japan-related policies.

Added to that were tensions in the Gulf. The Shiite uprising against the minority Sunni monarchy in tiny Bahrain sucked in Sunni neighbor Saudi Arabia -- which sent troops in to help quell the disturbance -- as well as Saudi rival Iran, which denied accusations it was fomenting the unrest.

The two events sent oil prices sharply up, down and then up and down again as traders sought to determine the net effect on the market.

News on Wednesday gave the Dow index its biggest one-day plunge in seven months -- a 242 point, or two percent drop.

At its lowest point Wednesday, when fears over the potential for Japan's quake-stricken nuclear reactors to meltdown were strongest, the Dow was off from the previous Friday's close by 3.9 percent.

Helped by data that confirmed the US economy's recovery, -- or a halting recovery, at least -- stocks recovered on Thursday and Friday.

But it was not nearly enough to end the week higher. The blue chip index closed the week off 2.5 percent to 11,858.5, its worst week since August.

The broader S&P 500 played out the same way, dropping heavily in Monday-Wednesday trade before regaining some of the loss to finish 2.5 percent lower at 1,273.72.

The tech-heavy Nasdaq Composite suffered more, closing the week down 2.8 percent, at 2,643.67.

With Japan's nuclear situation still not under control, the Arabian peninsula tensions continuing, and a cease-fire declared in Libya apparently not holding late Friday, analysts saw a rocky road ahead next week.

"There remains an elevated level of concern that uncertainty in the Middle East and Japan is going to have far-reaching consequences," said Michael James of Wedbush Morgan Securities.

"You have as many people believing that the sell-off in the US market is overdone as you have people fearing that you are going to have further negative consequences for the global economy from what is going on in Japan and the Middle East."

"It is difficult to make an objective judgment about a market that on one day is driven by fear and the next day the absence of fear, when actually nothing has changed," said Gregori Volokhine of Meeschaert New York.

"If we imagine that, at the same time, we have a nuclear disaster, a massive tsunami in the world's third largest economy, Arab countries in revolt, including in Bahrain, 40 kilometers from the Saudi oil fields, and a European debt crisis not about to be resolved, it is remarkable that the market is this strong," he said.

The week ahead will see data releases on the housing market (Monday and Wednesday) and February durable goods sales (Thursday) that could provide more guide to the economy's direction.