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| Recession fears knock US shares | Recession fears knock US shares |
| (20 minutes later) | |
| US share prices have plummeted nearly 8% on renewed global recession worries, despite government action to strengthen the financial system. | US share prices have plummeted nearly 8% on renewed global recession worries, despite government action to strengthen the financial system. |
| The Dow Jones index fell 733 points to 8,577 points, in its biggest percentage fall since 26 October 1987. | |
| There were steep share price falls across the rest of the market, with the Nasdaq index dropping 8.4% | |
| Earlier, there were similar plunges in European markets - London fell 7% and Frankfurt and Paris both lost 6%. | |
| Ben Bernanke, the chairman of the Federal Reserve, warned that the US economy now faced a "significant threat" from the credit crisis. | Ben Bernanke, the chairman of the Federal Reserve, warned that the US economy now faced a "significant threat" from the credit crisis. |
| Slowing economy | Slowing economy |
| Many investors are now convinced that the US economy, if not already in a recession, is moving towards one. | |
| Meanwhile the leaders of the G8 major industrialised nations have agreed to hold a summit with other countries to discuss global financial reform. | Meanwhile the leaders of the G8 major industrialised nations have agreed to hold a summit with other countries to discuss global financial reform. |
| The move follows a call by UK Prime Minister Gordon Brown to rebuild the IMF to help regulate the world's financial systems. | The move follows a call by UK Prime Minister Gordon Brown to rebuild the IMF to help regulate the world's financial systems. |
| The economy remains fairly weak, the recovery isn't going to happen overnight Kim Rupert, Action Economics | The economy remains fairly weak, the recovery isn't going to happen overnight Kim Rupert, Action Economics |
| Mr Brown told the BBC that the meeting would take place in "the next few weeks". | Mr Brown told the BBC that the meeting would take place in "the next few weeks". |
| In the US, the economic impact of the credit crisis was highlighted in two reports published on Wednesday. | In the US, the economic impact of the credit crisis was highlighted in two reports published on Wednesday. |
| September retail sales recorded their biggest monthly decline in more than three years, while a Federal Reserve report showed economic activity had weakened across the country. | September retail sales recorded their biggest monthly decline in more than three years, while a Federal Reserve report showed economic activity had weakened across the country. |
| In a speech in New York, Mr Bernanke said the US had avoided making the mistakes that helped plunge the country into the 1930s Great Depression. | In a speech in New York, Mr Bernanke said the US had avoided making the mistakes that helped plunge the country into the 1930s Great Depression. |
| He pledged that the Fed would continue to fight the credit crisis. But he warned it would take time for the country's economic health to mend. | He pledged that the Fed would continue to fight the credit crisis. But he warned it would take time for the country's economic health to mend. |
| "The turmoil in financial markets and the funding pressures on financial firms pose a significant threat to economic growth," he said. | "The turmoil in financial markets and the funding pressures on financial firms pose a significant threat to economic growth," he said. |
| "The last decade has shown that bursting bubbles can be an extraordinarily dangerous and costly phenomenon for the US economy." | "The last decade has shown that bursting bubbles can be an extraordinarily dangerous and costly phenomenon for the US economy." |
| Unimpressed | Unimpressed |
| Reaction to Mr Bernanke's speech was mixed. | Reaction to Mr Bernanke's speech was mixed. |
| Kim Rupert, of Action Economics in San Francisco, said: "There was only a little bit of mention of the economy but it was all pretty much stuff that we already knew." | Kim Rupert, of Action Economics in San Francisco, said: "There was only a little bit of mention of the economy but it was all pretty much stuff that we already knew." |
| The inevitable reversal for equity markets does seem to be under way Matt Buckland, CMC Markets UK unemployment increases againBank crisis to dominate EU talksNew York 'faces 165,000 job cuts' Cary Leahey, of Decision Economics in New York, said: "He is basically doing a stand-and-be-counted speech to an elite audience in New York. | The inevitable reversal for equity markets does seem to be under way Matt Buckland, CMC Markets UK unemployment increases againBank crisis to dominate EU talksNew York 'faces 165,000 job cuts' Cary Leahey, of Decision Economics in New York, said: "He is basically doing a stand-and-be-counted speech to an elite audience in New York. |
| "He is saying 'we will not stand down until the system is repaired' and 'we will use every resource to ease the crisis'," he added. | "He is saying 'we will not stand down until the system is repaired' and 'we will use every resource to ease the crisis'," he added. |
| Earlier in Europe, markets were also badly hit by fears of recession - the UK's FTSE 100 fell 7.16%, Germany's Dax shed 6.49% and France's Cac 40 lost 6.82%. | Earlier in Europe, markets were also badly hit by fears of recession - the UK's FTSE 100 fell 7.16%, Germany's Dax shed 6.49% and France's Cac 40 lost 6.82%. |
| "The inevitable reversal for equity markets does seem to be under way," said Matt Buckland, a dealer at CMC Markets. | "The inevitable reversal for equity markets does seem to be under way," said Matt Buckland, a dealer at CMC Markets. |
| However, there were signs that banks were becoming more willing to lend to each other. | However, there were signs that banks were becoming more willing to lend to each other. |
| The cost of borrowing between banks, as measured by London interbank offered rates (Libor), fell slightly on Wednesday. | The cost of borrowing between banks, as measured by London interbank offered rates (Libor), fell slightly on Wednesday. |
| It was the second consecutive session that Libor rates for euros, dollars and pounds had eased, and the cost of borrowing fell for all loan durations - from overnight to one year. | It was the second consecutive session that Libor rates for euros, dollars and pounds had eased, and the cost of borrowing fell for all loan durations - from overnight to one year. |
| How worried are you about a recession? What financial questions would you like to put to the experts? Send us your queries using the form below. | How worried are you about a recession? What financial questions would you like to put to the experts? Send us your queries using the form below. |
| In most cases a selection of your comments will be published, displaying your name and location unless you state otherwise in the box below. | In most cases a selection of your comments will be published, displaying your name and location unless you state otherwise in the box below. |