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Global stocks see sharp declines Global stocks see sharp declines
(about 2 hours later)
European shares were down sharply in late afternoon trading, mirroring earlier falls in East Asia as worries about the US economy continue. European shares lost ground on Monday, mirroring falls in Asia as concerns grew about the US economy.
The UK's FTSE 100 index was 1% lower at 6,464 by late afternoon in London, while Germany's Dax had lost 1.2%, and France's Cac had shed 1.7%. The UK's FTSE 100 index ended 1.1% lower at 6,459 while Germany's Dax lost 1.2%, and France's Cac shed 1.4%.
And on Wall Street, the Dow Jones index lost ground - extending Friday's heavy fall which first prompted the slumps.And on Wall Street, the Dow Jones index lost ground - extending Friday's heavy fall which first prompted the slumps.
Earlier, Tokyo's Nikkei index closed 2.2% lower. Investors fear that uncertainty over firms' exposure to credit problems is having a damaging impact on the economy and company profits.
There are also concerns that that the full effects of the US housing slowdown have not yet been seen.
Caterpillar warningCaterpillar warning
The Dow Jones, the main US share index, fell 367 points on Friday, the 20th anniversary of the Black Monday stock market crash.The Dow Jones, the main US share index, fell 367 points on Friday, the 20th anniversary of the Black Monday stock market crash.
And it had lost another 80 points in the first hour of Monday trading, though the tech-heavy Nasdaq index was 0.1% ahead. And it had lost another 65 points, or 0.5%, to 13,456 points in late-morning trading, though the tech-heavy Nasdaq index was 0.1% ahead.
Earlier, Tokyo's Nikkei index closed 2.2% lower as markets across Asia suffered fresh jitters.
Friday's slump on Wall Street is going to dominate market sentiment as the new trading week gets under way Matt Buckland, a trader with CMC Markets Q&A: What's troubling the markets?Friday's slump on Wall Street is going to dominate market sentiment as the new trading week gets under way Matt Buckland, a trader with CMC Markets Q&A: What's troubling the markets?
US falls were triggered by concerns that the full effects of the housing slowdown had not yet been seen. Last Friday's slump started when the building equipment firm Caterpillar cut its profit forecast, blaming the state of the economy.
It started when the building equipment firm Caterpillar cut its profit forecast, blaming the state of the economy.
Caterpillar added that the US economy would be "near to, or even in, recession" next year.Caterpillar added that the US economy would be "near to, or even in, recession" next year.
'Sentiment driven''Sentiment driven'
"Friday's slump on Wall Street is going to dominate market sentiment as the new trading week gets under way," said Matt Buckland, a trader in London with CMC Markets."Friday's slump on Wall Street is going to dominate market sentiment as the new trading week gets under way," said Matt Buckland, a trader in London with CMC Markets.
"Obviously there's speculation that we may see a repeat of the losses from Black Monday some 20 years ago, and with little economic data being scheduled for release, it's going to be sentiment rather than the fundamentals that provide the bulk of the direction.""Obviously there's speculation that we may see a repeat of the losses from Black Monday some 20 years ago, and with little economic data being scheduled for release, it's going to be sentiment rather than the fundamentals that provide the bulk of the direction."
On Black Monday in 1987, the Dow Jones fell 23%, which nowadays would mean a drop of more than 3,000 points.On Black Monday in 1987, the Dow Jones fell 23%, which nowadays would mean a drop of more than 3,000 points.
The fall on the FTSE 100 comes after it had recovered from the panic that gripped markets in August in the wake of the global credit squeeze.The fall on the FTSE 100 comes after it had recovered from the panic that gripped markets in August in the wake of the global credit squeeze.
Last month the US Federal Reserve slashed interest rates from 5.25% to 4.75%, making borrowing cheaper, in a bid to encourage more consumer spending and corporate activity.Last month the US Federal Reserve slashed interest rates from 5.25% to 4.75%, making borrowing cheaper, in a bid to encourage more consumer spending and corporate activity.
And some believe that polic ymakers will reduce rates again when they meet next week. And some believe that policy makers will reduce rates again when they meet next week.