Gloomy European Markets Slump Again
European shares fall heavily in Monday trade, compounding last week's heavy falls - and threatening worse to come.

September 30, 2002

US shares have plunged in early trading, dragging major European markets down with them.

Half-an-hour into the day, the Dow Jones index was down 226 points at 7,475.

London's FTSE 100 was 214 points lower at 3,693, with the Paris and Frankfurt markets also substantially down.

The losses, which were widely predicted after last week's market pessimism, make September one of the worst months in recent stock market history.

However, the White House economic adviser Glenn Hubbard sounded a note of optimism, predicting an economic recovery in the next three months.

The economy has a recovery that's underway - Glenn Hubbard, White House economic adviser

Transatlantic troubles

Since the end of August, most major share indexes have lost at least 10% of their value, and the Dax is down by one-quarter.

Investor nervousness has been compounded by fresh concerns over the US economy.

The week sees an unusually heavy barrage of reports from the sluggish US economy, including crucial labour and manufacturing data, car sales and factory orders.

Monday is also the end of the US third quarter-year, heralding the start of the next wave of corporate earnings reports.

Some gloomy trading statements last week - including struggling tech giant JDS Uniphase, retailer Wal-Mart and cigarette maker Philip Morris - have raised fears that the results may not prove encouraging.

But Mr Hubbard said he expected business investment to pick up in the next quarter.

"The economy has a recovery that's underway," Mr Hubbard said in a speech to the National Association of Business Economics.

East is best

Only in Asia were the markets more robust on Monday morning.

Tokyo's Nikkei share index, which has only slipped marginally in the past month, eased by 1.54%, with sentiment buoyed by hopes of speedier reform of the banking sector.

Asian shares, traditionally less vulnerable to the swings of Wall Street, have performed far more strongly than the world average in the past few weeks.

http://news.bbc.co.uk/2/hi/business/2287881.stm