Stock markets gloomy

Investors returned to Wall Street in a cautious mood on Wednesday, following the rollercoaster ride the previous day.

After morning trading, the Dow Jones index was down some 120 points, while the technology-heavy Nasdaq index was down just over 20 points. On Tuesday both indices had experienced wild swings of more than 600 points.

But Europe's stock markets suffered some steep falls. Trading in Frankfurt and Paris was volatile, but on both markets the key indices were down by about 3% at 1530 GMT.

London investors, though, were locked out of their market for most of the day, because of computer problems at the London Stock Exchange.

Trading started at 1545 London time (1445 GMT), and was set to run for a specially extended session until 1730GMT.

Following the general trend, the FTSE 100 index quickly lost 130 points before stabilising somewhat. Traders said the timing of the standstill could not have been worse, as investors were eager to sell into a volatile market.

Few bargain hunters

On other European markets, some investors are reported to have gone bargain hunting, buying telecoms, media and technology shares at knock-down prices in the hope of a market recovery.

But the direction of the market is still far from clear. "People are uncertain what to make of the whole thing," said a senior trader in European equities for an Asian bank.

Turbulent time

On Tuesday, US stocks had one of their most turbulent days in history, as investors fled technology shares following a court case ruling against the world's biggest software company, Microsoft.

Both the Dow Jones and the Nasdaq plunged more than 500 points, before rebounding.

The Nasdaq reached a low of 3,649 points, a 13% drop on the day, before recovering to close down 74 points at 4,148.

The Dow Jones Industrial Average recovered from its lows to close down 46 points at 11,178.

Initially some analysts said that Microsoft's problems were just an excuse for investors to buy "old economy" stocks instead.

On Monday, the Nasdaq had fallen 8% while the blue chip Dow Jones had remained strong.

But tumbling technology stocks dragged blue chip stocks lower on Tuesday.

Trading was volatile. From its high to its low on Tuesday, the Nasdaq swung 634 points, its biggest one-day points swing ever, while the Dow swung nearly 700 points.

Microsoft ruling

On Monday, District Court Judge Thomas Penfield Jackson had found Microsoft guilty of breaking US anti-trust law by attempting to monopolise the internet browser market.

The judge has not yet decided what action to take against Microsoft, but penalties could include a break-up of the company.

Judge Jackson plans a new round of hearings to decide on "remedies".

Microsoft has said that it will appeal the verdict.

Legal analysts say the case could go all the way to the US Supreme Court, delaying significant changes in the market for several years.