Wall Street rebounds

Trade was nervous and volatile

Share prices on Wall Street have rebounded from recent heavy losses.

Many had feared that US stocks would crash on Monday, following Friday's slump in prices.

But bargain hunters moved in to buy shares at knock-down prices, helping Wall Street rally.

The Nasdaq ended up 217 points or 6.5% at 3,539, its biggest one day points gain to date.

The benchmark Dow Jones Industrials Average ended up 276 points or 2.5% at 10,582.

This market has behaved and acted much better than most had anticipated

Ned Riley, State Street Global Advisors

Money poured into household technology names such as IBM and Cisco.

But the Dow Jones and the Nasdaq indices changed direction several times on Monday.

Trade was nervous and volatile and opinions differ as to whether the sell-off is over.

"I don't think the bull market is ready to go away just yet," said Arthur Hogan, chief market analyst at Jefferies & Co.

"This market has behaved and acted much better than most had anticipated," Ned Riley, chief investment strategist at State Street Global Advisors, admitted.

But Peter Boockvar, an equity strategist at Miller Tabak & Co, doubted this was the end of the selling.

"There was major damage last week, and people's confidence was shaken -- we're not just going to bounce right back to where we were,'' he said.

European recovery

Earlier strong rises by the US markets had helped fuel a recovery in European stock markets which, like Asia, had plummeted following the US sell-off on Friday.

Worldwide, technology shares were among those hit hardest.

In London alone, £57bn was initially wiped off company values in opening trading, and it was a similar picture on other major European exchanges.

In London the FTSE 100 fell to a six-month low in the first few minutes. It was down more than 260 points at 5,917 - a drop of 4%.

At the end of the day it stood at 5,994 - a loss of 183.5 points. However, London was clearly worst off among European bourses.

Market misery

Japan - down 6.98%

Hong Kong - down 8.55%

South Korea - down 11.63%

Australia - down 5.7%

Singapore - down 8.69%

Other markets took their lead from the Wall Street open, quickly erasing most of their earlier losses.

The Cac 40 in Paris initially fell 255 points, but recovered to close down a mere 5 points at 6,060.

The Xetra Dax in Frankfurt also staged a comeback, closing at 7,187 - a loss of 27 points despite after a 300 point drop earlier in the day.

The Nikkei index in Tokyo closed down 1,426 points at 19,008 - a fall of 6.98%.

There were similar falls in Singapore, Hong Kong, Sydney and Seoul.

Traders in Australia saw shares plummet

The declines follow a collapse on New York markets on Friday, which saw the Dow Jones Industrial Average suffer a record plunge of 616 points, or 5.6%, to 10,307.

The US technology weighted Nasdaq index had closed down 355.7 points, or 9.7%, at 3,321 - a drop of 25% over the week.

Investor worries

Many financial experts now say that private investors should sit tight and not panic.

Mark Dampier, of stockbrokers Hargreaves Lansdown, said: "The market was due for a correction. It was definitely becoming overheated and we are now seeing the reaction to that overheating.

"It's likely to be a pretty bumpy ride for the next few days, if not weeks."

But he said he did not advise private investors to engage in any panic selling.

"For those investors prepared to take a long-term view, this market correction could be seen as a useful buying opportunity."