World Markets Mixed Day After U.S. Plunge

European Stocks Made Gains While Asian Markets Closed Lower After Wall St.'s Sharp Losses

(CBS/AP)  European stocks closed higher Tuesday, tracking a U.S. rally that recovered some of the previous day's sharp losses. Asian markets closed lower earlier in the day.

The FTSE 100 closed 1.4 percent higher at 4,122.86, helped by a 12.5 percent jump in the share price of British Airways PLC, which said it is in merger talks with Australian rival Qantas. Tesco shares soared 13.0 percent after reporting upbeat sales in the third quarter.

The CAC-40 index in France closed 2.4 percent higher at 3,152.90, while Germany's DAX was the best performing major European index, up 3.1 percent at 4,531.79, as car companies such as Daimler AG and Volkswagen AG recouped most of the previous session's losses.

European stock markets had showed little direction before the positive open of U.S. markets.

The Dow Jones industrial average was up 2.7 percent at 8,367.08 as investors bought back into equities after the savage retreat on Monday, when the Dow closed down almost 700 points, or 7.7 percent, wiping out more than half of last week's gains.

Monday's losses caused Asian markets to slump overnight and close sharply lower. Japan's Nikkei 225 stock average tumbled 533.53 points, or 6.4 percent, to 7,863.69, and Hong Kong's Hang Seng index lost 5 percent to 13,405.85.

The recovery in European and U.S. stocks on Tuesday was largely a reaction to Monday's heavy losses, when a run of bad data increased fears that the length and depth of the global economic downturn will be larger than anticipated.

It all culminated with Monday's announcement by the National Bureau of Economic Research, considered the arbiter of the U.S. economic cycle, that the world's largest economy entered a recession in December 2007, much earlier than most predictions reports CBS News correspondent Charlie D'Agata.

"If the U.S. economy is entering a depression, it is far too soon, even for an equity market that tries to discount conditions six months or a year ahead, to be looking for economic recovery," said Stephen Lewis, chief economist at Monument Securities.

The optimism that saw U.S. stocks rise for five straight days last week for the first time since July 2007, has all but evaporated amid renewed worries about the global economy. The data expected out of the U.S. over the rest of the week, culminating in Friday's closely watched jobs report for November, are expected to make for further grim reading.

Despite the recession which has taken hold across the developed world, some companies are managing to post solid performances. One notable example was British supermarkets chain Tesco PLC, which saw its share price rise Tuesday by over 13 percent after it reported like-for-like sales, excluding revenues from its gas pumps, up 2 percent during the third quarter.

"Yet again Tesco has defied the laws of gravity, kicking market recession fears firmly in the teeth," said Howard Wheeldon, senior strategist at BGC Partners.

Tesco will be hoping that the widely anticipated 1 percentage point rate reduction Thursday from the Bank of England will help entice shoppers in the crucial Christmas trading period ahead. The European Central Bank is also expected to cut its benchmark rate by at least half a percentage point on Thursday.

Earlier, Australia's central bank slashed its key interest rate Monday a full percentage point to 4.25 percent in an attempt to prevent the economy from sliding into recession. But investors took scant comfort from the move, sending the benchmark S&P/ASX 200 index down 4.2 percent to 3,528.2.

Benchmarks in the Philippines, Taiwan, India and South Korea also dropped sharply.

Markets on mainland China were mixed, with food processors up following a lifting of price controls but banks down on economic jitters. The benchmark Shanghai Composite Index slipped 0.3 percent, while the Shenzhen Composite Index rose 1.4 percent.

The bleak outlook for the world economy drove oil prices to three-year lows earlier below $48 a barrel. By late afternoon in Europe light, sweet crude for January delivery recovered to trade down only $0.92 to $48.36 a barrel.

The dollar was higher against the Japanese yen at 93.57 yen from 93.36 yen earlier in the European afternoon Tuesday. The euro strengthened to $1.2716 from $1.2695.

The pound, meanwhile, which slumped around 3.5 percent against the dollar Monday after dismal British manufacturing data, was up at $1.4943.

[mrmeatspin]

what you are witnessing is the coming of the new world order..and morons like "inventagod2" and his childlike whining, moaning, tantrums and hissy fits made it all possible

if you think your living in a ''facist'' state..wait until im finish with your arse

[mrmeatspin]

".......... he would have seen this coming, and done something..."


Posted by inventagod2 at 02:32 PM : Dec 02, 2008
+ report abuse

*********

you are so full of sh*t!

and if Bush did try to save your arse..be honest with yourself..i bet you would conjure up some conspriacy about being facist yadi yadi da..your ranting is all the same..there is no direction there is no logic..


bush does something..you *****
bush does not do anything..you *****..

[generey]

U.S. rally that recovered some of the previous day''s sharp losses.

I HATE when this happens.

[inventagod2]

Seems like a fitting end to the Bu$h legacy.
If the lying president had told the truth once in his career, he would have seen this coming, and done something...
Worst administration in history.

[edward1975-2009]

Wall St. plunged yesterday after it was reported in the press, that we have been in a recession since 2007. It took a report to tell these guys that! You gotta be kidding me. And our spineless Congress is thinking of giving these guys $700 billion. Save the money, it appears that Wall St. couldn''t pour **** out of a boot with the instructions on the heel.

[harp1963]

The war in Iraq, the tax cuts for people who have tens/hundreds of millions in the bank, all the free trade that has eliminated hundreds of thousands of good paying jobs so people with tens/hundreds of millions can exploit slave labor in third world countries.....Thanks George, and thanks to your majority Republican Congress and Senate the first six years of your eight year train wreck. May you live to be 130 with the last 50 years having a beautiful large breasted soft handed nurse changing your diapers.

[pepperwood2]

We all know that''s a bunch of bs. Why all the major news media & wall street posted a record Black Friday spending spreeeee by the Consumers.

Now I suppose that the headlines of a pending Nuclear and/or Biological attack on the US in the coming months will serve to increase the Dow today to a record & the price of Oil should bound up according to the Speculators.

In the meantime the Consumers are still waiting for the Gasoline, Diesel & Heating Oil prices to start dropping down where it should be.

Wall Street, Congress & the Save the Planet Kooks are willing to use the same tactics over the last 3 years that they used to force the consumer into a bind. I know, this was good in order to cut down our purchasing of more trash for cash, to save the Planet. The World Agenda that our Liberal Congress, UN, World Governments & Banking & News Media were pushing.

This should be Good News for Al Gore''s Team. The Inconvenient Truth. These Kooks should be out dancing in the streets. We are doing with less cash to purchase more trash that would end up poluting our landfills & Planet. We''re doing our part. Less fat cats & corportations cheating the consumers with Congress''s Blessings.