World stock markets took another heavy hit Thursday as investors were unable to overcome fears of a global recession and fretted over downbeat corporate projections. Share prices tumbled in Asia, Europe and in early deals on Wall Street in the wake of heavy losses on Wednesday, which came despite fresh government measures to snuff out a financial crisis threatening the critical flow of credit to businesses. However, Wall Street's share indexes managed to close mostly higher Thursday. The Dow Jones Industrial Average rose 172.04 points (2.02 percent) to end at 8,691.25 after swings in both directions of over 270 points and following a 514-point tumble on Wednesday. The tech-dominated Nasdaq composite however closed down 11.84 points (0.73 percent) at 1,603.91, while the broad-market Standard & Poor's 500 index rose 11.34 points (1.26 percent) 908.11. The market action came after a two-day pounding on fears of more troubles for corporate earnings as the impact of the financial crisis hits the economy. Some analysts said the market had been pushed down to levels attracting buyers. “Investors remain very nervous and the violent market swings seen in October, together with the extreme pessimistic market sentiment readings, are at classic bottom levels,” said Al Goldman at Wachovia Securities. The recent volatility “could be the final shake of the tree to get the last of the ‘sell-at-the-bottom' holders out of their stocks at the most disadvantageous prices,” said Bob Dickey at RBC Wealth Management. Kevin Giddis, analyst at Morgan Keegan, said a crucial benefit to the market was a drop in key interest rates such as Libor, a benchmark for interbank loans that has been at the center of the credit crisis. “Mounting evidence suggests that conditions in the short-term credit markets are slowly improving, with Libor continuing to fall,” he said. “It's way too early to know how close we may be to normalcy, but these trends provide some sense of optimism that the great unthawing may finally be near.” Outside the US, Britain's leading share index ended up 1.2 percent, rallying late on with Wall Street and as rising crude boosted heavyweight oil stocks. The FTSE 100 closed at 4,087.83 points, up 46.94 or 1.16 percent. European stocks fell 0.1 percent in choppy trade as losses in banks and automobiles eclipsed gains in oil and defensive shares. The FTSEurofirst 300 index of top European shares ended 0.1 percent lower at 872.72 points, having earlier been as low as 845.75. Banks topped the loser board. Credit Suisse dropped nearly 4.2 percent after the group made a 1.7 billion Swiss franc trading loss in the third quarter and warned the fourth quarter would be tough. In Frankfurt, the DAX index ended at 4,519.7 points, down 51.37 or 1.12 percent. In Paris, the CAC-40 index closed at 3,310.87 points, up 12.69 or 0.38 percent. In Zurich, the Swiss market index closed at 5,893.73 points, down 31.73 or 0.54 percent. In Milan, the All Share Mibtel index closed at 16,193 points, down 33 or 0.20 percent. In Tokyo, Japan's Nikkei average hit its lowest point since May 2003 then pared its losses to end down 2.5 percent on a report that the US administration may consider a $40 billion plan to help stop housing foreclosures. Honda Motors and other exporters dragged on the market as the yen climbed against the dollar and the euro on growing worries about the global economy, while bank shares such as Mizuho Financial were also battered. The Nikkei shed 213.71 points to 8,460.98 after earlier falling as low as 8,016.61, its lowest in nearly five and a half years and down more than 7 percent. It has lost 25 percent this month. Hong Kong shares trimmed losses to 3.6 percent on hopes of further succor for the markets from the US government, but the main index closed below 14,000 points to take losses this year to more than 50 percent. The Hang Seng Index closed 506.11 points lower at 13,760.49 after dropping 6 percent earlier in the day. The index has shed 50.5 percent so far this year and lost 10.2 percent in three sessions including Thursday's slide. Australian shares fell 4.4 percent, extending the previous day's slide, led by a 14.6 percent drop in miner Rio Tinto as global recession worries continued to hammer commodities prices. The S&P/ASX 200 index fell 181.7 points to 3,974.4, adding to a 3.4 percent slide on Wednesday. In Johannesburg, South Africa's rand firmed against the dollar as bargain-hunting boosted US stocks, while local shares were dragged lower by weaker commodity prices and negative sentiments. The All-share index closed at 19,598.57 points, down 690.05 or 3.40 percent. The All Gold index closed at 1,621.27 points, down 96.21 or 5.60 percent, while the Industrial index closed at 15,622.26 points, down 631.39 or 3.88 percent. - Reuters On Thursday some of the world's biggest companies gave voice to deep pessimism regarding their prospects in the months ahead. Investors appeared to ignore the crucial interbank market, where interest rates continued to weaken, indicating that banks - bolstered by government support moves - were at last starting to lend money to one another. Wall Street shares fell in volatile morning trade, giving back opening gains after a huge sell-off a day earlier on recession fears. However, it turned higher in erratic trading as investors, while still nervous about growing signs of a weakening economy, picked up bargains from stocks that were beaten down in a two-day sell-off. There was clearly little conviction behind the buying; investors were attracted to stocks that were pummeled in two days of selling that sliced nearly 750 points off the Dow Jones industrial average. There is a growing belief on the Street that the economy is either in a recession or headed for one despite government relief efforts and gradual improvements in world credit markets. With its move higher, Wall Street is living up to predictions that trading will remain volatile for some time to come as investors try to test whether the market has formed a bottom. “It's people coming in that see tremendous value, but for a more sustainable advance I think we need more time,” said Steven Goldman, chief market strategist at Weeden and amp; Co. in Greenwich, Connecticut. Wall Street digested a rush of corporate news. Goldman Sachs Group Inc. is preparing to cut about 10 percent of its work force, according to a person briefed on the plan who requested anonymity because the company hadn't publicly disclosed details of the plan. On Wednesday, the Dow fell 514 points as investors worried that the global economy is poised to weaken even as parts of the credit market slowly show signs of recovery.
