Wall Street and European stock markets reeled after the worst quarterly decline, on a 12-month comparison, in US gross domestic product (GDP) since 1982.
Also denting sentiment was an announcement that the US government will own up to 36% of Citigroup under a deal announced today to convert up to $25 billion of capital injected into the ailing bank to ordinary shares.
Europe's main stock markets plunged, with London's FTSE closing more than 2% lower at 3,830 points after the news of the sharp contraction in the US economy last year. Financial stocks all showed significant losses, with Lloyds down 22%, Royal Bank of Scotland 20% lower and Barclays down 17%.
Frankfurt's DAX plummeted 2.5% to 3,844 points and in Paris the CAC fell 1.5% to 2,702.
Dublin's ISEQ bucked the trend and closed 24 points (1%) higher, at 2,074. But again, bank stocks showed sharp losses, with Bank of Ireland down more than 7 cent, or 28.5%, at 19 cent. AIB was down 19% at 38 cent and Irish Life & Permanent was down 9% at 63 cent. Greencore was almost 6% higher at 74 cent, however, and Elan was 3% higher at €5.18.
After sharp losses in morning trade on Wall Street, markets have recovered somewhat and are now hovering around yesterday's closing prices. A short time ago, the Dow Jones was 4 points higher at 7,186 and the Nasdaq was 2 points up at 1,394.
Earlier in Tokyo, the Nikkei closed 110 points higher at 7,568 but Hong Kong's Hang Seng closed 83 points down at 12,811.
