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Stocks rebound from Monday slump Stocks rebound from Monday fall
(20 minutes later)
Shares in Europe have rebounded from Monday's heavy losses, following a largely positive session in Asia.Shares in Europe have rebounded from Monday's heavy losses, following a largely positive session in Asia.
In London the FTSE 100 index was up 1.8%, in Frankfurt the Dax added 1.7% and in Paris the Cac 40 gained 1.4%.In London the FTSE 100 index was up 1.8%, in Frankfurt the Dax added 1.7% and in Paris the Cac 40 gained 1.4%.
Asian markets were largely higher, Tokyo's Nikkei average closed up 1.5%, Hong Kong's Hang Seng added 1.3% and Mumbai's Sensex was up 1.4%.Asian markets were largely higher, Tokyo's Nikkei average closed up 1.5%, Hong Kong's Hang Seng added 1.3% and Mumbai's Sensex was up 1.4%.
Investors are expecting the US Federal Reserve to slash interest rates later on Tuesday to boost the US economy.Investors are expecting the US Federal Reserve to slash interest rates later on Tuesday to boost the US economy.
Some think it might cut its benchmark Fed funds rate by one percentage point.Some think it might cut its benchmark Fed funds rate by one percentage point.
The rebound recovers some, but not all, of the losses on Monday.The rebound recovers some, but not all, of the losses on Monday.
Investor fearsInvestor fears
Shares on Wall Street had a volatile session on Monday.Shares on Wall Street had a volatile session on Monday.
The Dow Jones industrials average ended 0.18% higher, after tumbling in early trading.The Dow Jones industrials average ended 0.18% higher, after tumbling in early trading.
European shares had fared worse.European shares had fared worse.
The UK's FTSE 100 index, France's CAC 40 and Germany's Dax slumped by more than 3%.The UK's FTSE 100 index, France's CAC 40 and Germany's Dax slumped by more than 3%.
Investors fear that the collapse of Bear Stearns, one of Wall Street's biggest names, means that the credit crunch is escalating, hastening the onset of a worldwide recession.Investors fear that the collapse of Bear Stearns, one of Wall Street's biggest names, means that the credit crunch is escalating, hastening the onset of a worldwide recession.
They are now awaiting results from some of the other key US investment banks, with both Goldman Sachs and Lehman Brothers reporting their latest results.They are now awaiting results from some of the other key US investment banks, with both Goldman Sachs and Lehman Brothers reporting their latest results.
central bank actioncentral bank action
On Monday central banks in both the UK and US moved to ease the crisis.On Monday central banks in both the UK and US moved to ease the crisis.
The Bank of England injected £5bn to boost lending among banks, while the Fed cut its discount rate - the interest rate at which it lends to commercial banks - from 3.5% to 3.25%.The Bank of England injected £5bn to boost lending among banks, while the Fed cut its discount rate - the interest rate at which it lends to commercial banks - from 3.5% to 3.25%.
And US President George Bush attempted to reassure investors, accepting that the American economy faced "challenging times" but insisting that the Fed was "on top of the situation".And US President George Bush attempted to reassure investors, accepting that the American economy faced "challenging times" but insisting that the Fed was "on top of the situation".
"When need be, we will act decisively, in a way that continues to bring order to the financial markets," he said. "In the long run, our economy is going to be fine.""When need be, we will act decisively, in a way that continues to bring order to the financial markets," he said. "In the long run, our economy is going to be fine."

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