Worldwide share jitters continue

Market turbulence has returned after two days of gains

Global stocks finished down on Friday, as concerns returned about the state of the worldwide financial sector.

With analysts saying some investors were also profit taking after two days of solid rises, Wall Street's main Dow Jones index lost 171 points to 12,207.

The Nasdaq ended 35 points lower, while London's FTSE fell 6.8 points to 5,869, and Frankfurt's Dax lost 4.3 points.

Analysts said sentiment was hit by rumours of more big losses to be reported in the global banking sector.

Dutch banks ING and Fortis were mentioned in some reports. Both said they declined to comment on market speculation.

There was also rumours that one of the main US hedge funds was in financial difficulty.

US economic plan

Global stocks had risen earlier on Friday as investors welcomed the previous day's announcement of a US government plan to spend $150bn (£76bn) reviving the country's economy.

We expect sharp gains and losses in the next few days and weeks Heinz-Gerd Sonnenschein, a strategist at Postbank

Strong earnings from Microsoft and building equipment firm Caterpillar had also helped to lift the mood, with Japan's main Nikkei index closing up 4%.

On Monday, stock markets from Japan to the UK were heavily sold on growing fears that the US would fall into a recession and drag down other key economies too.

In many markets, the falls were the worst since the 11 September 2001 attacks on the US.

The resulting turmoil prompted the Fed, the US central bank, to cut US rates to 3.5% from 4.25%.

Analysts now expect more volatility in the short term.

"We expect sharp gains and losses in the next few days and weeks," said Heinz-Gerd Sonnenschein, a strategist at Postbank in Germany.

"The US has done many things to stabilise the market, but all the bad news is not yet out there."