The Dow Jones fell for the second consecutive day amid a lack of major news to lift the market.

The index finished 20 points lower at 8432.

A computer hardware problem froze trading at the world's largest exchange and sent US financial markets into a state of suspended animation for nearly an hour.

The interruption halted all New York Stock Exchange trading from 1316 local time (1816 GMT) for 59 minutes.

It was the first of its kind in three years for the exchange, which suffered a one-hour opening delay on December 18, 1995.

Dealings had been relatively light before the interruption.

Good third-quarter results from telecommunications firm AT&T were counterbalanced by poor figures from giant chemical concern Union Carbide.

Union Carbide also issued a warning for its fourth-quarter outlook.

Europe

Despite an erratic performance in New York, shares in Europe managed to stay in positive territory.

London shares managed to stay in positive territory

London remained firm, but well off early highs. The leading FTSE 100 index finished 14 points higher at 5231.

Poor trade figures did not seem to move the market, but trading was thin after initial futures-driven activity.

German and French markets showed strong gains after the new left-wing government in Germany made it clear that it favoured further interest rate cuts.

In Frankfurt, the DAX index powered ahead by 126 points, or more than 2%, after the European summit seemed to endorse job growth over the fight against inflation.

The market was also boosted by the final agreement of shareholders for the merger of Daimler Benz and the US Chrysler group to go ahead.

In Paris, the Cac 40 index also posted a strong gain, up 55 points or more than 1%.

Tokyo

The main share index in Japan, the Nikkei, was down 2.1%, or 301 points, to finish at 13,843, on further worries over the health of the financial sector.

Last week the government finally moved to nationalise the most troubled of Japan's 19 big banks - the Long Term Credit Bank of Japan.

But confidence was shaken by news that Moody's Investors Service planned to review the ratings of four major Japanese banks and eight major insurance companies.

The governor of the Bank of Japan, Masaru Hayami, said that the cautious lending by the banks, overburdened by bad debts, was slowing down any recovery.

"There is a major decline in capital spending due to the cautious lending..it is difficult to see a quick economic recovery," he said.

And chief cabinet secretary Hiromu Nonaka said that the government would take punitive measures against banks with too-tight lending policies, including the suspension to business contracts.

Last week Tokyo shares had recovered from their record lows, rising 10% until the rally fizzled on Friday.