Rollercoaster for shares

Wall Street traders face volatile times

US stock markets made a spirited recovery in late trading after a fresh tech stock-led plunge.

The recent falls in the share values of internet and technology related companies have erased the stunning gains most made in the first quarter of the year.

The fear of higher interest rates is continuing to sink in

Larry Rice, Josephthal Lyon & Ross

Within the first hour of trading the main index for the Nasdaq market, home to most of America's technology stocks, was down 195 points - or 6% - to 3,193.

While the slide was then halted, there was little recovery until the last hour and a half of trading when bargain hunters moved back in and the losses began being wiped away.

At the close the Nasdaq was down just 26.2 points at 3,364.2.

The Dow Jones industrial average, which reflects the share prices of most of America's largest companies, was also recovering, more than halving its losses to stand 84.3 points lower at 10,542.5.

UK tech fallers on Monday

Lastminute: -13%

QXL: -8%

iii: -8%

eXchange: -7%

365: -6%

Kingston: -14%

That is more than 10% below its highs of the year, but still about 5% above the lows hit this year.

The early falls in America hit sentiment in Europe where the previously upbeat main markets, went into reverse after US trading began at 1330 GMT.

Technology stocks were hardest hit with the UK's Techmark index down 3.6% in afternoon trading, closing 126.5 points lower at 2,925.6.

Continuing Friday's woe

London's FTSE 100 index closed down 9.9 points at 6,035.5. In Paris the benchmark Cac 40 index was 101 points lower at 6,094.2 and Germany's key Xetra Dax index ended 76 points down at 6,912.9.

Monday's losses followed falls on Friday when high-tech companies also saw the value of their shares drop on fears of a new round of interest rate rises.

The Nasdaq closed down 148 points at 3,390 on Friday.

The Dow Jones index fared only slightly better on Friday as it briefly shed as much as 200 points, ending trading with a 150 points loss at 10,626.

Market makers said the jitters were caused by news that the US economy has chalked up yet another record trade deficit of $30bn.

This renewed worries that the Federal Reserve, the US central bank, might raise interest rates even further, after a 0.5% rise on Tuesday.

Higher interest rates are considered to harm stock prices, as they make other investments more attractive.

Larry Rice, chief investment officer at Josephthal Lyon & Ross said: "I just think the fear of higher interest rates is continuing to sink in".