Economy woes leave stocks mixed European shares lost ground on Monday, mirroring falls in Asia as concerns grew about the US economy. The UK's FTSE 100 index ended 1.1% lower at 6,459 while Germany's Dax lost 1.2%, and France's Cac shed 1.4%. However on Wall Street, shares reversed earlier losses to move into positive territory - clawing back a little of Friday's heavy falls. Investors fear that uncertainty over companies' exposure to credit woes is denting the economy and firm's profits. There are also concerns that that the full effects of the US housing slowdown have not yet been seen, analysts say. Caterpillar warning The Dow Jones, the main US share index, fell 367 points on Friday, the 20th anniversary of the Black Monday stock market crash. But it was 48 points, 0.4% ahead, at 13,570.2 in afternoon trading while the tech-heavy Nasdaq index was 1% ahead. Earlier, Tokyo's Nikkei index closed 2.2% lower as markets across Asia suffered fresh jitters.
Q&A: What's troubling the markets? Last Friday's slump started when the building equipment firm Caterpillar cut its profit forecast, blaming the state of the economy. Caterpillar added that the US economy would be "near to, or even in, recession" next year. 'Sentiment driven'
On Black Monday in 1987, the Dow Jones fell 23%, which nowadays would mean a drop of more than 3,000 points. The fall on the FTSE 100 comes after it had recovered from the panic that gripped markets in August in the wake of the global credit squeeze. Last month the US Federal Reserve slashed interest rates from 5.25% to 4.75%, making borrowing cheaper, in a bid to encourage more consumer spending and corporate activity. And some believe that policy makers will reduce rates again when they meet next week. |