Shares tumble again

The leading index of shares in both New York and London suffered further heavy blows on Thursday.

US shares slumped a further 383 points, bringing its total losses this week to more than 1,200 points or about $1.2 trillion.

Closing prices, Thursday 20 September

Dow Jones down 383 points to 8,376

Nasdaq down 57 points to 1,471

Ftse down 165 points to 4,557

Dax down 232 points to 3,810

Cac down 151 points to 3,738

And the broader Standard and Poor's index of shares - often seen as the market's best indicator - closed below the 1,000 threshold for the first time since October 1998.

Shares had also fallen heavily in Asia and Europe on Thursday, as the markets grew increasingly nervous of US retaliation after last week's terrorist attacks.

London's FTSE index, which had already been well down in morning trade, dropped further in sympathy with US markets and closed 165 points lower at 4,557.

This is lowest close of London's leading index since June 1997.

'Blinded'

The fresh burst of selling in the US came after Federal Reserve Chairman Alan Greenspan said the attacks would have a significant effect on the US economy in the short term.

And the extent of the impact of 11 September attacks is gaining pace, as more and more companies report profit warnings and lay off staff.

Impact of attacks: Percentage drop since close on 10 Sept to 1500 GMT 20 Sept

Dow Jones -10.4%

Nasdaq -11%

Ftse -9.7%

Cac -14.7%

Dax -16.8%

Investors were also occupied with concerns over the US military build-up in the Gulf.

"The market is still blinded by uncertainty over the extent of American retaliation in the Middle East and how on earth they are going to do it," said Jeremy Batstone, head of research at NatWest Stockbrokers.

In the UK, Oil and bank shares were lower but most attention focussed on the outlook for airlines.

British Airways shares dropped more than 12% to a 10-year low of 143p after the company said it was cutting 5,200 more jobs on top of 1,800 announced earlier this month and trimming its flight schedule by 10%.

Asian troubles

French and German stock markets were also substantially lower, primarily because of the same fears over US retaliation and the impact on the global economy.

Paris's Cac 40 closed 151 points lower at 3,738 while Frankfurt's Dax ended 232 points down at 3,810.

Asian markets had already closed lower, ending three days of stability.

Overnight, Japan's leading Nikkei index moved 154 points lower to 9,785 while Hong Kong's Hang Seng index fell 240 points to 9,317.98.