Stocks in turmoil on Wall Street gyrations

European shares closely tracked the New York Stock Exchange, going into a frenzied freefall after the start of trade on Wall Street, briefly pulling back and then plummeting.

The Dow Jones Industrial Average was down 3.62 percent at 8,268 around mid-day while the Nasdaq exchange had lost 2.72 percent to reach 1,600.39.

The Dow had been clawing back lost ground, after an earlier plunge of 7.9 percent, until Bush blamed “uncertainty and fear” for much of the global financial meltdown and insisted US authorities had the tools to confront the crisis.

Worries are understandable but “anxiety can feed anxiety and that can make it hard to see all that is being done” to address the problem, he said, promising: “We can solve this crisis, and we will.”

In Europe, Frankfurt, London and Paris plunged again by about 10 percent after the Wall Street open before paring their losses but remained down by 6.0-7.0 percent in value.

“Sadly it is now impossible to call the bottom of this market rout,” said Howard Wheeldon, senior strategist at BGC Partners in London.

“Irrational fear has gripped (investors) and it seems that markets will now trash almost anything that walks. For now it is unstoppable.”

The initial losses came as Japan’s Nikkei plunged 9.6 percent, while major European bourses slid as much as 11 percent amid heightened worries about a seizing up of the global financial system.

Market action came as world finance chiefs were preparing an emergency meeting in Washington. Interest rate cuts and billions of dollars’ worth of cash injections by central banks failed to calm the mayhem.

“The crisis is now self-reinforcing and shows no signs of abating,” said Chris Lafakis at Economy.com.

Tokyo nosedived, as the credit crisis claimed its first Japanese financial institution with the bankruptcy of Yamato Life Insurance, driving the Nikkei stock index down by the biggest daily drop for two decades.

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