European markets opened higher Tuesday, following a global selling spree the day before, although fell back slightly by early afternoon trading.
A trader monitors offers in the Standard & Poor’s 500 stock index options pit Monday in Chicago, Illinois.
Europe’s major exchanges were all higher in early trading, although by 1345 GMT London’s FTSE was down 1.2 percent. The CAC in Paris gained 0.8 percent. In Frankfurt, the Dax picked up 0.7 percent.
In Asia, markets were mixed, but mostly lower. Tokyo’s Nikkei average closed down 0.7 percent and the All Ordinaries index in Australia shed 1 percent. In Seoul, the KOSPI gained 0.7 percent, while Hong Kong’s Hang Seng plunged 2.3 percent.
Stocks tumbled Monday on Wall Street, with the Dow and Standard and Poor’s 500 falling to 12-year lows after insurance company American International Group’s huge quarterly loss added to worries about the financial sector and the economy.
The Dow Jones industrial average lost almost 300 points, or 4.2 percent, to end at 6,763, its lowest point since April 25, 1997.
The S&P 500 index lost 34 points, or 4.7 percent, ending at 701, its lowest close since Oct. 28, 1996.
The Nasdaq composite lost 55 points, or 4 percent, to end at 1,323. The tech-fueled Nasdaq has held up better than the other major averages this year and remains above its close of 1,316 from Nov. 20, 2008.
The stock losses Monday were in response to AIG posting a $62 billion fourth-quarter loss, but also a continuation of the worries about the financial sector and the economy, said Bill Stone, chief investment strategist at PNC Financial Services.
“There are reverberations from AIG and also the continued uncertainty around the financial sector as a whole, which is the chorus that never ends,” he said.
“That’s paired with the second chorus that never ends — the weakness of the global economy,” he said. “It’s reflected in the weakness in the industrial, material and energy stocks today.”
For the full year, AIG lost $99 billion after reporting a profit of $9.3 billion in 2007.
To keep the company from collapsing and infecting the broader financial market, the government is revising its bailout for the third time and committing an additional $30 billion in exchange for cumulative preferred stock. The rescue plan now totals $162.5 billion.
Investors also remain wary about the various government initiatives to try to stem the recession, announced over the past few weeks, said Mark Travis, president and CEO at Intrepid Capital Funds. They include the newest bank bailout plan, the $787 billion economic stimulus plan and the $75 billion mortgage modification plan.
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Filed under: European Market , european, European markets, European markets mixed after day of losses
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