Stock prices fell and bonds rose in Europe today as another round of corporate profit warnings deflated relief over yesterday’s global stock market recovery.
European shares fell from the opening, ignoring Wall Street's relief rally, where the Dow Jones Industrial Average jumped 4.47 per cent yesterday after slumping 14.26 per cent last week.
The pan-European FTSE Eurotop 300 index fell 1 per cent and has now lost about 13 per cent since suicide attacks levelled the World Trade Center, leading the United States to declare what it calls a war on terrorism.
"The S&P futures are suggesting the bounce we saw on Wall Street will be unwound today and there is this continued to-ing and fro-ing between the two markets," said Mr Jeremy Hawkins, senior economic adviser at Bank of America.
Stocks fell in all major European markets and US S&P 500 index futures were 6.4 points lower at 1,001.1.
Energy led the sectoral losers with a 3.8 per cent drop as crude prices, reflecting recent oil weakness. Royal Dutch fell 3.6 per cent, Shell 4.3 per cent and BP 5.6 per cent.
Although the markets seemed calmer, analysts said the two main questions were what military action the US was likely to take in response to the assaults and how the US economy was faring.
Key to the future direction of stock markets will be US consumer confidence data due for release this afternoon. The figures will be the first gauge of consumer confidence since the terrorist attacks on September 11th.