Stock markets halt slide

American and Asian stock markets have failed to stage any sort of pre-Christmas recovery.

But there was some relief for investors as the major indexes at least managed to halt their recent run of declines.

We are seeing a jittery market that is for sure, but at least the bleeding has stopped for now

Peter Coolidge

On Friday in Asia the major markets were largely unchanged, with gains in Japan, Singapore, Hong Kong and Australia of less than 1%.

That followed the hesitant recovery seen in the US on Thursday which saw the benchmark technology index, the Nasdaq, closing up 7 points at 2,340.

That was a much brighter performance than Wednesday, when it fell 7% to its lowest level since March 1999.

Safe haven search

The Dow Jones Industrial Average, home to America's long established corporate giants, also brought an end to its recent falls, by closing up 168 points at 10,487.

But few traders have been expressing confidence that a full scale rally is under way as fears remain that the US economy could be heading into a recession.

Some technology stocks - heavily sold on Wednesday - continued to be offloaded in Thursday's trade.

Among the stocks hardest hit in the US were Palm, the maker of handheld organisers.

The company has doubled its sales in the second quarter but still disappointed analysts with its revenues.

Bargain hunters emerged for blue chip stocks, with safe-haven companies such as Coca Cola and Wal Mart in demand.

"We are seeing a jittery market that is for sure, but at least the bleeding has stopped for now," Peter Coolidge, managing director of equity trading at Brean Murray and company.

Europe losses

Earlier on Thursday European markets clawed back some of their lost ground in afternoon trade, though the benchmark UK FTSE 100 index closed at a seven-month low.

The index clawed back some lost ground but still closed 61 points lower at 6,115 points.

The benchmark German Dax index closed down 48 points or 0.77% at 6,200.71 points while France's Cac 40 index closed down 7.4 points at 5758.9 points.

On Thursday Japan's Nikkei 225 index had fallen 3.5% to its lowest closing level for about two years.

Growth fears

The world's stock markets were responding to a grim Wednesday on Wall Street, which was in turn prompted by fears that the US economy is heading into a recession.

The Nasdaq index, dominated by high-tech firms, fell more than 7% to the lowest level since March 1999, while the Dow Jones Industrial Average fell 2.5%.

Combined value of Nasdaq firms

March 10: $6,711bn

Dec 20: $3,399bn

Decline: $3,312bn

The Nasdaq has seen 55% of its value lost since the heady days of spring when the index closed above 5,000.

The combined value of all the companies listed on the Nasdaq stock market has fallen by $3,312bn since the tech stock bubble burst.

The $3,312bn fall in the combined value of the firms is not just bad news for US investors.

It also increases the threat of a hard landing for the US economy as consumers see the value of their investments fall and stop the spending which fuelled a decade of growth.

The latest sequence of falls was prompted by the US Federal Reserve's decision not to cut interest rates.