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Dow Dive Has Mixed Impact Abroad

Although Japan's stock market shrugged off the Bad News Bears from Tuesday's Dow tumble, European markets were jittery Wednesday.

Japan's stock market dipped early in the day Wednesday, but clawing back to finish almost even. The Nikkei 225 index closing at 15,992, off 31.42 for the day or 0.20 percent, CBS News Correspondent Barry Petersen reports from Tokyo.

At one point in the day, the Nikkei was down more than 1 percent, but made back almost all its losses.

Why didn't it follow the Dow down? Analysts say there are signs of good news coming from within Japan. The "Bridge Bank" bill, which will set out how Japan will fix its ailing banks, was presented to the Diet, Japan's Parliament, Wednesday.

It will be the main topic of debate during an extraordinary Diet session over the next two to three months.

Japan's newly installed Prime Minister Keizo Obuchi has promised tax cuts in excess of the 6-trillion yen discussed earlier. For the average taxpayer in Japan - with a tax rate of 65 percent - it means cutting taxes to about 50 percent in the hopes that more money in people's pockets will flow into the stalled economy.

"We're seeing a welcome shift toward action by the government," one analyst told CBS News.

The fact that Japan held firm means that the American market has the chance to recover.

In Europe, the wave broke as soon as trading opened Wednesday morning, CBS News Correspondent Allen Pizzey reports from London. Britain's equivalent of the Dow Jones dropped 126 points as soon as the market opened, but it did recover slightly and was on an upward trend.

Analysts say that the market drop was a correction that was long overdue. The European markets were high a month or so ago, but have been growing less bullishly than the American markets.

The DAX, Germany's Dow Jones, and the French CAC-40 Index both had dropped and they began to correct.

Trading is slow in Europe anyway in July and August because most of the participants take some time off. But as one analyst put it, there will be a white-knuckle ride in Europe and all eyes will be on Wall Street Wednesday.