Wall Street struggles amid recession fears

Mark Lennihan / AP

By Roland Jones

U.S. stocks were wavering Friday amid lingering fears of a global recession.

The Dow Jones industrial average fell more than 70 points in the first few minutes of trading, but was lately working off that low and edging higher. The index lost 391 points Thursday. Earlier, Asian and European stock markets fell sharply, but European stocks were recovering from their losses in mid-morning trading.

Investors have been turning away from investments that carry risk, worried about a global economic slowdown. U.S. stock markets have fallen for four straight sessions, The Associated Press reports, noting that the move has driven the broad Standard & Poor's 500-stock index down more than 7 percent this week, while the Dow has dropped 6.7 percent?-- its worst showing since the week ended Oct. 3, 2008, when Congress struggled to pass the $700 billion bank bailout known as the Troubled Asset Relief Program.

CNBC reports that the Dow is on track for its worst week since October 2008:

Traders found little comfort in an official pledge late Thursday from finance ministers from 20 leading economies to take "all necessary actions to preserve the stability of the banking systems and financial markets" and make sure banks have the cash they need to stay in business.

Europe?s debt crisis looked more acute Friday after news that Moody's Investors Service had downgraded eight Greek banks. The rating agency said the banks hold too much Greek debt and noted that Greece's economic situation is worsening as its government tries to cut spending, which is leading to protests.

Greece appears to be moving closer to default. Reuters reported Friday that Greece's Finance Minister Evangelos Venizelos was quoted by two newspapers as saying an orderly default with a 50 percent haircut for bondholders was one of three scenarios for resolving the country's fiscal woes. That news led to worries that more European banks would have to write down their Greek debt holdings if the country defaulted.

Source: http://bottomline.msnbc.msn.com/_news/2011/09/23/7919089-wall-street-drops-again-as-global-stock-rout-continues

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