World stocks slide amid economic gloom

European stock markets fell for the second consecutive day Thursday after earlier big Asian losses amid mounting concerns about the world economy and the financial health of businesses around the globe.

The FTSE 100 index of leading British shares was down 43.99 points, or 1.0 percent, at 4,463.52, despite another interest rate reduction from the Bank of England of half a percentage point.

Meanwhile Germany's DAX fell 54.06 points, or 1.1 percent, to 4,883.41. France's CAC-40 was down 55.62 points, or 1.7 percent, to 3,290.47.

Earlier, every major market in Asia posted a fall, marking an end to a New Year's rally that had been spurred by speculation that massive government spending and low interest rates would lead to an economic rebound later this year.

But hopes seem to fade after dour outlooks from tech heavyweight Intel, computer maker Lenovo and aluminum producer Alcoa, among others, highlighted the toll that the economic slump is taking on companies around the world. A worse-than-expected reading of the U.S. labor market only added to investor fears.

"Some are seeing this as the end of the bear market rally and with a lot of negative data flying around," said Jimmy Yates, a dealer at CMC Markets.

The latest selling pressure was stoked overnight on Wall Street, where investors sent stocks sharply lower after Intel warned about poor business conditions and an employment survey predicting that the private sector shed a greater-than-expected 693,000 jobs in December, fraying nerves ahead of Friday's official employment report from the government.

The Dow average tumbled 245.40, or 2.7 percent, to 8,769.70, its biggest point and percentage decline since Dec. 1. Broader stock indicators also tumbled, with the S&P 500 index falling 28.05, or 3 percent, to 906.65. European markets fell sharply as well.

U.S. futures pointed to further losses in New York. Dow futures were down 42 points, or 0.5 percent, at 8,702 while S&P 500 futures fell 3.1 points, or 0.3 percent, to 902.10.

Earlier in Asia, Tokyo's Nikkei 225 stock average lost 362.82, or 3.9 percent, to 8,876.42, snapping a seven-day winning streak as the yen traded higher, and Hong Kong's Hang Seng Index fell 571.55 points, or 3.8 percent, to 14,415.91.

Elsewhere South Korea's Kospi shed 1.8 percent, Australia's benchmark dropped 2.3 percent and Taiwan's key index lost 5.3 percent. India's market, which plunged Wednesday after the chairman of major outsourcing company Satyam Computer admitted doctoring the firm's accounts for several years, was closed for a holiday.

As in the U.S., news on the corporate front in Asia was grim.

Shares in Lenovo Group plunged more than 26 percent in Hong Kong trade after the world's fourth-largest computer maker warned it expects a loss for its latest quarter and will lay off 11 percent of its workforce and cut executive pay.

Meanwhile, Cathay Pacific, Asia's No. 3 carrier, said it could lose nearly $1 billion from bad hedges on jet fuel and reiterated its profit warning for 2008, saying passenger and cargo traffic had weakened significantly. Cathay's shares shed 7.6 percent in Hong Kong.

In Australia, shares in Macquarie Group Ltd dropped 3.7 percent after the country's leading investment bank said "exceptionally challenging" market conditions in the fourth quarter would hurt profits.

Light, sweet crude for February delivery rose 58 cents to $43.21 a barrel in electronic trading on the New York Mercantile Exchange. The contract plunged $5.95 overnight to settle at $42.63.

In currencies, the dollar weakened 0.9 percent to 91.79 yen, while the euro traded 0.6 percent to $1.3553.