Wednesday, 18 September, 2002, 20:52 GMT 21:52 UK
Stock markets take new tumble
World stock markets have suffered another sharp knock as a string of poor results and the ongoing threat of war took their toll.
Companies on both sides of the Atlantic painted a gloomy picture, with bad news from US software firm Oracle and financial group JP Morgan Chase reverberating across banking and telecom stocks in Europe.
In Frankfurt, the Dax index of leading shares fell back to five year lows, while London's FTSE 100 index slid below the crucial 4,000 level, closing down almost 160 points at 3,865.
Analysts warned that there could be more unpleasant surprises ahead with a number of companies missing forecasts.
The bad news was sparked by warnings of weaker revenues from JP Morgan Chase, the second largest US bank, which said bad loans and subdued trading results would hit third-quarter earnings.
The news sent the company's own shares down 9.5% to $19.50 and also affected the banking sector as a whole, dragging down markets across the world.
In the UK, Barclays was closed down 8.2% at 403 pence, while the Dutch group ABN Amro fell 7.2%.
Other companies reporting tough conditions included software group Oracle and sports group Nike.
Worse than the dentist Dow Jones industrial index managed to recover some of its earlier falls by the close of trading, but still finished down 0.4% at 8,173, a six-week low.
In Europe, analysts described the market as "fragile", with the German Dax 30 index closing down 5% at 3,1224 and the French Cac 40 finishing 3.6% lower at 3,001.
Analysts said the run of bad news had knocked any earlier hints of a possible rally and prompted suggestions that the US recovery would be slower than hoped .
Stuart Fraser, head of European equities at Standard Life Investments, said: "It's like going to the dentist for root canal treatment - you hope it can be sorted in one sitting but you keep having to endure more pain every few months".
Shadow of war threat
As well as the disappointing company news, analysts said the possibility of an attack on Iraq was still preying on investors' minds.
Despite president Saddam Hussein's concession to re-admit U.N weapons inspectors, the US has said it still wants to pass a resolution backing tough action against Iraq.
"The risk of war is a heavy risk, which still weighs on the market," said
Francois Garnier, manager of HMG Euro-Opportunite.
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