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Last Updated: Thursday, 18 May 2006, 21:15 GMT 22:15 UK
Volatile day sees US stocks slide
Nasdaq building in New York
The Nasdaq suffering its longest losing streak in 12 years
US shares closed the day behind after fluctuating between positive and negative territory during the day.

The Dow Jones industrial average, which had suffered its biggest one day points drop in three years on Wednesday, closed down 0.69% at 11,128.29.

And the tech-heavy Nasdaq suffered its longest losing streak in 12 years.

European markets sharply fluctuated too , as the FTSE 100 fell before closing down slightly, France's Cac was also behind, and Germany's Dax ahead 0.24%.

The initial falls came after US inflation figures were higher than expected on Wednesday, fuelling fears of further interest rate rises.

There is a lot of global uncertainty on where interest rates are going and where commodity prices are going, which makes it a difficult market to predict
Hilary Cook at Barclays Stockbrokers

In Wednesday's trading, the London FTSE fell 170 points, with the US Dow Jones index losing more than 210 points.

Asian markets followed suit the next day, with exchanges from Japan to Australia losing up to 3%.

On Thursday, after a see-saw day, the three main US markets closed down. As well as the Dow, the Nasdaq closed down 0.7% at 2,180.3 - marking its worst streak since 1994 - and the S&P closed down 0.67% at 1261.81.

Uncertainty

Some analysts argue that the falls are an overdue market correction.

"There is a lot of global uncertainty on where interest rates are going and where commodity prices are going, which makes it a difficult market to predict," said Hilary Cook at Barclays Stockbrokers.

"But after the falls we have seen we would expect some consolidation, although it is going to be a bumpy ride."

Traders will be concerned about eurozone interest rates after higher-than-expected eurozone inflation figures were released on Wednesday.

Higher inflation could make the chance of a rise from the current 2.5% level more likely.

And if the euro continues to rise in value against the dollar, this could make it tougher for European companies to export, as they become less competitive, economists argue.

Despite the risks from high and volatile oil prices and exchange rate movements, EU Economic and Monetary Affairs Commissioner Joaquin Almunia was optimistic about global growth and European recovery.

The markets will be closely watching to see what US Treasury Secretary John Snow has to say when testifying before the Senate on international economic and exchange rate policies.


MARKET DATA - 11:36 UK

FTSE 100
5429.64up
23.70 0.44%
Dax
5733.05up
19.54 0.34%
Cac 40
3784.02up
14.48 0.38%
Dow Jones
10403.79up
78.53 0.76%
Nasdaq
2273.57up
35.31 1.58%
S&P 500
1115.71up
11.22 1.02%
BBC Global 30
5707.15up
20.65 0.36%
Data delayed by at least 15 minutes

SEE ALSO:
Q&A: Turmoil on world markets
18 May 06 |  Business
Asia mirrors falling world stocks
18 May 06 |  Business
Why the dollar is falling so fast
15 May 06 |  Business
Surprise fall in US trade deficit
12 May 06 |  Business
Weak retail figures hit US shares
11 May 06 |  Business
US rates raised to five-year peak
10 May 06 |  Business



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