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| Version 19 | Version 20 |
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| Jitters remain among US investors | Jitters remain among US investors |
| (10 minutes later) | |
| Jitters continued among US investors as worries about losses linked to sub-prime lending offset earlier gains. | Jitters continued among US investors as worries about losses linked to sub-prime lending offset earlier gains. |
| Wall Street had moved higher in early trading as the Federal Reserve pumped an extra $2bn into global markets. | Wall Street had moved higher in early trading as the Federal Reserve pumped an extra $2bn into global markets. |
| However the Dow Jones closed largely unchanged, down 0.02% at 13,236.5 while the Nasdaq lost 0.1% to 2542.4. | However the Dow Jones closed largely unchanged, down 0.02% at 13,236.5 while the Nasdaq lost 0.1% to 2542.4. |
| Earlier European and Asian markets had made strong gains, after last week's global sell off, as central banks tried to ease fears of a world credit crisis. | Earlier European and Asian markets had made strong gains, after last week's global sell off, as central banks tried to ease fears of a world credit crisis. |
| The European Central Bank earlier said on Monday it was injecting a further 48bn euros into the banking sector. | The European Central Bank earlier said on Monday it was injecting a further 48bn euros into the banking sector. |
| London's FTSE 100 closed 2.3% up at 6,237.8, France's Cac-40 ended was 2.2% ahead and Germany's Dax rose 1.8%. Asian markets had posted modest rises. | London's FTSE 100 closed 2.3% up at 6,237.8, France's Cac-40 ended was 2.2% ahead and Germany's Dax rose 1.8%. Asian markets had posted modest rises. |
| US investors reacted well to official figures showing a stronger-than-expected rise in July's retail sales. | US investors reacted well to official figures showing a stronger-than-expected rise in July's retail sales. |
| But they continued to sell shares in financial firms as uncertainty about who would be next to be hit by concerns over lending. | But they continued to sell shares in financial firms as uncertainty about who would be next to be hit by concerns over lending. |
| Sub-prime woes | Sub-prime woes |
| Recent financial market volatility has been triggered by the US sub-prime mortgage sector, which offers higher-risk loans to people with a poor credit history. | Recent financial market volatility has been triggered by the US sub-prime mortgage sector, which offers higher-risk loans to people with a poor credit history. |
| Is Europe's central bank bailing out hedge funds unnecessarily? Robert Peston, BBC Business Editor Robert Peston's blog Q&A: Sub-prime lending | Is Europe's central bank bailing out hedge funds unnecessarily? Robert Peston, BBC Business Editor Robert Peston's blog Q&A: Sub-prime lending |
| As US interest rates have risen and the housing bubble has burst, a growing number of sub-prime borrowers have defaulted on their loans prompting extensive financial difficulties for a number of investment funds with heavy exposure to the sector - and triggering fears of a wider financial crisis. | As US interest rates have risen and the housing bubble has burst, a growing number of sub-prime borrowers have defaulted on their loans prompting extensive financial difficulties for a number of investment funds with heavy exposure to the sector - and triggering fears of a wider financial crisis. |
| While some estimates say $300bn in loans could be at risk, one of the biggest worries for investors is not knowing the eventual scale of the problem. | While some estimates say $300bn in loans could be at risk, one of the biggest worries for investors is not knowing the eventual scale of the problem. |
| "The big question is what is the overall amount [of loans at risk], and this is bad for the markets because if there is one thing that the markets hate, it is uncertainty," said Gilles Moec, senior economist at Bank of America. | "The big question is what is the overall amount [of loans at risk], and this is bad for the markets because if there is one thing that the markets hate, it is uncertainty," said Gilles Moec, senior economist at Bank of America. |
| Over the weekend several banks began putting a figure on their bad debts, including German state bank WestLB which said it had 1.25bn euros in total exposure to the US sub-prime sector. | Over the weekend several banks began putting a figure on their bad debts, including German state bank WestLB which said it had 1.25bn euros in total exposure to the US sub-prime sector. |
| Banking moves | Banking moves |
| To try to ease fears over available credit, several central banks have intervened by injecting money into the banking sector. | To try to ease fears over available credit, several central banks have intervened by injecting money into the banking sector. |
| The European Central Bank (ECB) was the first - releasing 95bn euros on Thursday. It has since put in another 109bn euros. | |
| Japan's central bank put one trillion yen ($8.5bn; £4.2bn) into the financial system last week and 600bn yen on Monday. | Japan's central bank put one trillion yen ($8.5bn; £4.2bn) into the financial system last week and 600bn yen on Monday. |
| Most importantly, the Fed intervened twice on Friday, pumping $38bn into the system, before Monday's extra contribution. | Most importantly, the Fed intervened twice on Friday, pumping $38bn into the system, before Monday's extra contribution. |
| But while some said it made sense, other feared it only made markets more nervous. | But while some said it made sense, other feared it only made markets more nervous. |
| "The ECB was correct to shore up banks' balance sheets by providing more liquidity," said Peter Morici, professor at the University of Maryland School of Business. | "The ECB was correct to shore up banks' balance sheets by providing more liquidity," said Peter Morici, professor at the University of Maryland School of Business. |
| "But its high-profile tender offer did more to scare markets than calm them." | "But its high-profile tender offer did more to scare markets than calm them." |
| Other analysts said it did not solve the underlying weakness in the US mortgage sector. | Other analysts said it did not solve the underlying weakness in the US mortgage sector. |
| "It's certainly very reassuring that central banks are providing liquidity, but that doesn't repair or make go away any losses funds have experienced from the sub-prime sector," said Guy Hutchings, of MFS Investment Management. | "It's certainly very reassuring that central banks are providing liquidity, but that doesn't repair or make go away any losses funds have experienced from the sub-prime sector," said Guy Hutchings, of MFS Investment Management. |
| As a result of the calm on the markets, oil prices had initially made gains but retreated on news that refinery problems were not as bad as initially thought. | As a result of the calm on the markets, oil prices had initially made gains but retreated on news that refinery problems were not as bad as initially thought. |
| US light, sweet crude rose 15 cents to settle at $71.62 a barrel on the New York, having risen above $73 earlier while in London Brent crude fell 16 cents to $70.23 having been close to $72. | US light, sweet crude rose 15 cents to settle at $71.62 a barrel on the New York, having risen above $73 earlier while in London Brent crude fell 16 cents to $70.23 having been close to $72. |