Asian stocks wilted Friday as the possibility of credit rating downgrades for major economies and bleak unemployment figures in the U.S. added to fears the recent massive rally was built on shifting sands, AP reported. After piling into battered markets over the past two months, running up gains of 30 percent or more from Asia to the U.S., investors are increasingly hard pressed to justify hopes that a global economic recovery is around the corner. In the U.S. and Europe overnight, markets were unnerved by a credit agency's warning about the British government's debt ratings. The threat of a downgrade could signal similar problems for the United States and other big economies staggering under a growing mountain of debt as they try to spend their way out of recession. An employment report from the world's biggest economy was equally dispiriting. Though the number of newly laid-off workers seeking unemployment benefits in the U.S. fell 12,000 to 631,000 last week, continuing claims rose to 6.7 million _ hitting a new record for the 16th consecutive week in data that goes back to 1967. The unrelenting bad news and recent losses on Wall Street were leading many investors to reassess their expectations about the economy and the recent rally, analysts said. «It seems the markets are at a crossroads. What were seeing today is a lot of confusion,» said Kirby Daley, senior strategist at Newedge Group in Hong Kong. «The markets here are trying to digest what is truly happening in the U.S. and trying to balance that with Asia.»
