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Europe stocks trim losses before Wall Street open

Europe stocks trim losses before Wall Street open

European stock markets fell, then recovered some lost ground Thursday on expectations Wall Street will not repeat the heavy selloff from the day before. Asian markets closed sharply down.
The FTSE 100 index of leading British shares was down 49.34 points, or 1.2 percent, at 3,956.34, while Germany's DAX was 50.87 points, or 1.2 percent, lower at 4,303.22. The CAC-40 in France was 58.61 points, or 1.9 percent, lower at 3,029.28.
The losses in Europe were dwarfed by the selling in Asian markets earlier, which came in the immediate aftermath of the steep 427 point, or 5.1 percent, decline in the Dow Jones index of leading U.S. shares on Wednesday. The broader Standard & Poor's 500 index slid 6.1 percent to 806.58. Both closed at their lowest levels since March 2003.
The selling pressure on Wall Street was expected to be fairly muted at the opening bell. Dow futures pointed to a 67 point, or 0.8 percent, decline to 7,960.00 while S&P futures dropped only 9.90 points, or 1.2 percent, to 802.60. Earlier in the European trading session, futures markets were anticipating far bigger falls in the U.S.
Despite the modest pullback, the markets remain extremely wary and vulnerable to any unpleasant shocks either on the corporate side on in broader economic data. The only major piece of U.S. economic news will be the weekly reading on unemployment claims. Wall Street expects weekly claims for unemployment benefits to decline by 11,000 but remain elevated.
Though investors have priced in a recession, they remain vulnerable to the way the financial crisis can change course suddenly, said Jeremy Batstone-Carr, head of research at Charles Stanley.
"This modern-day pandemic can morph across financial markets and makes it difficult for authorities to get to grips with," he said.
So far, Japan, Hong Kong and European countries including Germany and Italy are officially in recession and most expect the U.S. and Britain to be joining them soon, whatever fiscal stimulus policy-makers come up with in the coming days and weeks.
"Assurances that policy makers will 'take whatever steps (are) necessary to support the recovery' _ per the minutes of the October Federal Open Market Committee _ no longer serve to assuage uncertainty as they once did," said Neil Mellor, an analyst at Bank of New York Mellon.
Businesses have been quick to respond to the gloomy outlook by cutting jobs. Most notably, Citigroup said Monday that it is cutting 53,000 jobs around the world.
In Japan, Isuzu Motors Ltd. fell 17 percent after the truck maker said it will cut 1,400 contract workers as it scales back production for this fiscal year. Isuzu is the latest automaker to announce production cuts, joining domestic rivals such as Toyota Motor Corp. and Honda Motor Co.
In Britain, aircraft engine maker Rolls-Royce PLC said it plans to cut up to 2,000 jobs next year as demand for its products slumps amid the global economic downturn.
Earlier, Tokyo's benchmark Nikkei 225 average slid 570.18 points, or 6.9 percent, to 7,703.0 as figures showed exports in October sank 7.7 percent, the biggest decline since 2001, causing the country _ an export powerhouse _ to report a rare trade deficit.
Elsewhere in Asia, South Korea's main index fell for its eighth straight session, losing 6.7 percent to 948.69, as the country's currency, the won, fell to its lowest level in more than a decade. Hong Kong's Hang Seng benchmark sank 517.24 points, or 4 percent, to 12,298.56.
In Australia, the main stock measure retreated 4.2 percent as weakening commodity prices dragged down the country's natural-resource giants. BHP Billiton and Rio Tinto were both down 9 percent or more.
Compared to the rest of Asia, mainland China's markets suffered modest losses, after speculation over a possible deal by Disney to build a long-awaited theme park in Shanghai boosted property shares. The benchmark Shanghai Composite Index fell 1.7 percent.
The gloomy global economic outlook has taken its toll on oil prices, which have fallen to their lowest in nearly two years. Light, sweet crude for December delivery was down $1.32 at $52.30 a barrel in early-afternoon London trade. Overnight, the contract retreated $1.51 cents to settle at $52.11 a barrel on the New York Mercantile Exchange, the lowest since January 2007.
The dollar weakened 0.3 percent to 95.53 yen, while the euro edged was up 0.4 percent at $1.2557.
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AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.