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Shares fall on more economy fears Shares volatile on economy fears
(about 2 hours later)
US shares fell in early trading on Wall Street, following declines in Europe and Asia as concerns remain about the threat of a recession in the US. Wall Street shares made cautious gains in rocky trading on expectations that further rate cuts could lend further support for the US economy.
In opening exchanges, the Dow Jones index was down 0.5% or 64 points to 12,143, while the Nasdaq had lost 0.7%. By midday, the key Dow Jones index was up 0.6% or 78.77 points to 12,286, while the S&P 500 was also ahead.
Meanwhile, the UK's FTSE 100 was 2% lower, Germany's Dax had lost 0.7%, and France's Cac was down 1.6%. But worries over economic growth in Europe and fears over the health of the banking sector after a fraud at Societe General hit shares in the region.
Analysts said investors were cautious ahead of an expected interest rate cut from the Federal Reserve on Wednesday. The UK's FTSE 100 closed 1.3% lower, while France's Cac was down 0.6%.
Germany's Dax index meanwhile reversed earlier losses to finish at almost the same level as at Friday's close, up 0.03% at 6,818.85.
Analysts said investors were cautious ahead of a Federal Reserve meeting on Wednesday, at which the central bank is expected to cut rates.
In Japan, the Nikkei 225 had earlier finished the day's trading down 4%.In Japan, the Nikkei 225 had earlier finished the day's trading down 4%.
Hong Kong's Hang Seng index closed down 4.3%, while Mumbai's Sensex finished 1.1% lower.Hong Kong's Hang Seng index closed down 4.3%, while Mumbai's Sensex finished 1.1% lower.
'No appetite''No appetite'
Despite the falls, the market mood seemed calmer after last week's sharp ups and downs. Analysts said despite the falls in some markets, the mood seemed calmer after last week's sharp ups and downs.
The market appears to have hit bottom last week but it's still not in a position to keep rising, considering various events pending such as the Fed rate decision Koichi Ogawa, Daiwa SB InvestmentsThe market appears to have hit bottom last week but it's still not in a position to keep rising, considering various events pending such as the Fed rate decision Koichi Ogawa, Daiwa SB Investments
The week had begun with sharp stock market falls on growing worries over the US economy, only for them to recover later in the week by a $150bn (£76bn) stimulus plan agreed between the US Congress and the Bush administration. Last week began with sharp stock market falls on growing worries over the US economy, only for them to recover later in the week by a $150bn (£76bn) stimulus plan agreed between the US Congress and the Bush administration.
"Investors don't have the appetite to buy stocks now," said Francis Lun, general manager at Fulbright Securities in Hong Kong."Investors don't have the appetite to buy stocks now," said Francis Lun, general manager at Fulbright Securities in Hong Kong.
"The market appears to have hit bottom last week but it's still not in a position to keep rising, considering various events pending such as the Fed rate decision," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments in Tokyo."The market appears to have hit bottom last week but it's still not in a position to keep rising, considering various events pending such as the Fed rate decision," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments in Tokyo.
UncertaintyUncertainty
Many analysts are expecting the Federal Reserve, the US's central bank, to cut interest rates again when it makes its next scheduled decision on Wednesday.Many analysts are expecting the Federal Reserve, the US's central bank, to cut interest rates again when it makes its next scheduled decision on Wednesday.
Last week it reduced rates to 3.5% from 4.25% in an emergency move.Last week it reduced rates to 3.5% from 4.25% in an emergency move.
Analysts are also waiting for any further economic details in President Bush's State of the Union address late on Monday.Analysts are also waiting for any further economic details in President Bush's State of the Union address late on Monday.
"There's a lot of uncertainty out there: uncertainty over the US economy, uncertainty over China's economy," said Rob Hart, an analyst with Morgan Stanley in Hong Kong."There's a lot of uncertainty out there: uncertainty over the US economy, uncertainty over China's economy," said Rob Hart, an analyst with Morgan Stanley in Hong Kong.
"People are also worried about contagion in Europe," he added."People are also worried about contagion in Europe," he added.
"If the US slows down, will it trigger a slowdown in Europe?""If the US slows down, will it trigger a slowdown in Europe?"