World stock markets fall as U.S. ills spread

— -- No place to run. No place to hide.

As the sun moved west Monday, it shone on one market bloodbath after another. First Tokyo, then Hong Kong and Bombay. Later, Moscow, Frankfurt, Paris and London joined the casualty list. Market indexes in every important capital ran red.

"It's a scary time in markets worldwide. This is turning into a crisis of confidence around the world," said Eswar Prasad, former chief of the International Monetary Fund's financial studies division.

If the rest of the world once hoped it might decouple from the sputtering U.S. economic engine, those hopes have been shredded. Monday's comprehensive market rout was both a verdict of "not good enough" on the United States $700 billion financial rescue plan and a stark expression of the investor fear that is spreading without regard to borders.

"This is global, and this is the downside of globalization," said Stephen Wood, senior portfolio strategist with Russell Investments.

Investors were battered from one side of the globe to the other. In Jakarta, Indonesia, stocks dropped more than 10%. Trading in Russia was halted in an unsuccessful attempt to stop the slide; stocks plunged almost 19%. Frankfurt's Dax index sank 7%. Paris lost 9%.

Monday's nerve-rattling downturn reflected worries — only 72 hours after it had been signed into law — that the U.S. bailout will prove insufficient. Much of the investor anxiety was only made worse by Europe's halting efforts to safeguard its suddenly suspect banks.

As recently as last week, European officials confidently regarded the financial crisis as a mostly made-in-America problem. No longer. Sweden, Iceland and Denmark on Monday became the latest nations compelled to guarantee their citizens' bank deposits, joining Germany, which acted Sunday, along with Ireland, Greece and Austria.

The action was welcome, but the flurry of individual moves fell short of pan-European action akin to the U.S. Treasury's comprehensive approach. French President Nicolas Sarkozy, who hosted the leaders of Britain, Germany and Italy in a summit of Europe's four leading economies this weekend, had sought a coordinated response to the vulnerable banks. But vehement opposition from Germany and the U.K., loath to commit their taxpayers' money to bail out banks in fellow EU nations, sank the effort.