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Markets settle down after storm Late falls for Wall Street shares
(about 2 hours later)
Wall Street shares are having a mixed session without going far into positive or negative territory, despite tough sessions in Europe and Asia. Wall Street shares suffered sharp falls in late trading on Wednesday after spending the day jumping between positive and negative territory.
In early trading, the Dow Jones index fell below the 13,000 mark for the first time since 25 April. Twenty minutes before the market closed, the Dow Jones was trading down 155.8 points or 1.2% at 12,873.17.
But by 1600 BST (1100 local time), it was up 0.2% or 26.8 points at 13,055.7. The falls were set off by continuing concerns about the state of credit markets worldwide.
Earlier, global stocks fell as fears about credit market conditions, driven by problems in the US mortgage sector, continued to cause concern. It was the first time that the Dow Jones had fallen below the 13,000 mark since 25 April.
Investors were soothed by US government data that showed consumer inflation rising by just 0.1% in July, slightly less than expected. Earlier in the session, investors were soothed by US government data that showed consumer inflation rising by just 0.1% in July, slightly less than expected.
Credit problems
But there were still jitters from Tuesday's news that Sentinel Management Group, which manages $1.6bn in funds, was trying to stop its clients from withdrawing their money.But there were still jitters from Tuesday's news that Sentinel Management Group, which manages $1.6bn in funds, was trying to stop its clients from withdrawing their money.
Worries about a slowdown in US consumption were not helped by results from the department store Macy's, which blamed the "difficult" climate for a 77% fall in its quarterly profits.Worries about a slowdown in US consumption were not helped by results from the department store Macy's, which blamed the "difficult" climate for a 77% fall in its quarterly profits.
Falling markets The problems in the US housing market came to the fore again as Merrill Lynch told its clients to sell any shares they own in the country's largest mortgage lender, Countrywide Financial.
The modest upturn in New York trading helped London shares to recover some of their early losses, with the FTSE 100 closing well off its lows for the day, down 0.6%, or 34.2 points, at 6109.3. It warned that Countrywide could face bankruptcy if the availability of credit in the market gets any worse and there were market rumours that the lender had indeed failed to raise some money it needed.
But concern about the effect that the state of the US economy could have on Asian exports had already hit shares in Japan and Hong Kong.
Japan's Nikkei-225 index dropped 2.2% or 369 points to close at 16,475.61, its lowest close for eight months.
In Hong Kong, the Hang Seng lost 632 points or 2.9% to close at 21,375.7.