Global stocks have fallen back as concerns about world credit conditions, driven by problems in the US mortgage sector, continue to worry investors.
Wall Street shares are having a mixed session without going far into positive or negative territory, despite tough sessions in Europe and Asia.
Shares on Wall Street opened lower, with the Dow Jones index falling 0.4% to 12,971.2 and the Nasdaq shedding 0.3% by 1445 BST.
In early trading, the Dow Jones index fell below the 13,000 mark for the first time since 25 April.
Even news of just a mild inflation rise failed to pacify investors, still anxious about a credit crunch.
But by 1600 BST (1100 local time), it was up 0.2% or 26.8 points at 13,055.7.
Meanwhile, London's FTSE 100 was trading down 1.6% to 6,047.7 points.
Earlier, global stocks fell as concerns about credit market conditions, driven by problems in the US mortgage sector, continued to worry investors.
Fund injection
Investors were soothed by US government data that showed consumer inflation rising by just 0.1% in July, slightly less than expected.
The movement of the Dow Jones below the psychologically important 13,000-point barrier came despite US labour department data showing that the Consumer Price Index (CPI), the key measure of inflation, recorded just a small increase of 0.1% in July.
But there were still jitters from Tuesday's news that Sentinel Management Group, which manages $1.6bn in funds, was trying to stop its clients from withdrawing their money.
And Tuesday's comments from the Federal Reserve, that it would inject more funds into financial markets if needed, also failed to stem the sell-off. To ease fears over available credit, sparked by the downturn in the mortgage sector, the Fed has already pumped billions of dollars of emergency funds into the banking system in recent days - twice on Friday and again on Monday.
The modest upturn in New York trading helped London shares to recover some of their early losses, with the FTSE 100 down 0.6%, or 36.7 points, at 6106.8 by 1600 BST.
The European Central Bank (ECB) and the Bank of Japan have made similar moves.
Worries about a slowdown in US consumption have been driven by retail giant Wal-Mart lowering its profit forecast, after saying that its customers were straining under economic pressures such as high oil prices.
And department store Macy's has said that the "difficult" climate had seen its quarterly profits down 77%.
High-risk woes
Earlier Japan's Nikkei-225 index dropped 2.2% to finish at its lowest close in eight months.
Concern over the strength of US spending, and its impact on Asian exporters, meant that the Nikkei ended the day down 369 points at 16,475.61, its lowest level since December 2006.
In Hong Kong the Hang Seng closed down 2.9%, while in Europe France's Cac 40 index had lost 1.6% and Germany's Dax index slipped 0.6%.
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.
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.
