European shares ended mostly after briefly touching their lowest level since December 2006, led by weaker food and beverage stocks, as concern the US sub-prime crisis was far from over darkened investors' mood.
London's FTSE 100 index dropped 0.33% to 6,202 points, the CAC in Paris shed 0.54% to 5,371, but in Frankfurt the DAX edged up 0.06% to 7,718. Among major movers, Unilever fell 4.6% after Morgan Stanley downgraded its rating on the consumer goods giant, dragging down others in the sector.
US shares slumped over 1% as a warning from American Express about a weak economy highlighted worries in the finance sector despite a deal to rescue mortgage giant Countrywide.
The Dow Jones Industrial Average tumbled 1.2% to 12,696 just before 5.15pm, as the market reversed course after a two-day rally. The Nasdaq shed 1.1% to 2,461. The news from American Express overshadowed a deal announced earlier by Bank of America to buy ailing Countrywide Financial in a $4 billion stock swap that could bolster the nation's largest mortgage lender against a severe housing slump.
In Dublin, the Irish index of Irish shares recovered from early losses to stand up 0.5% at 6,661 at 5pm. C&C was up nine cent to €4.08 and CRH gained 37 to €22.79, while Irish Life & Permanent shed 24 to €10.50.
Earlier in Asia, Tokyo's Nikkei-225 index finished down almost 2% at 14,111. Most Hong Kong stocks fell as investors sought to cash in following the Merrill Lynch report. The Hang Seng Index closed down 1.3%, or 364 points, to end at 26,867, down 2.4% for the week.
