U.S. stocks down, Europe trims losses

LONDON -- U.S. stocks turned negative Thursday and European stocks trimmed their losses following drops in Asia that saw Tokyo's Nikkei index fall more than 11%.

The Dow Jones Industrial Average opened up, fell to the negative side and then was up by more than 50 points within 10 minutes of Thursday's opening of the New York Stock Exchange. But stocks then fell, reaching triple-digit losses shortly after 10 a.m. ET.

After Wednesday's 700-plus-point Dow loss, Asia stocks followed U.S. stocks into the pit. Tokyo's benchmark index lost 1,089 points, falling to 8,458.45 — its second-worst day ever and worst since the Oct. 19, 1987 stock market crash. Hong Kong's Hang Seng index fell 4.8%, South Korea's Kospi 9.4%, Singapore's Straits Times index 5.3%.

In Europe, losses were lighter. In London, the FTSE 100 index was down 3.21% and had fallen below the 4,000 level in early afternoon trading. In Paris, the Cac 40 index was off 3.94%. In Frankfurt, the Dax had dropped 2.68%.

The lower trading in European shares came as:

• Switzerland became the latest European government to roll out a plan to rescue its banks. UBS, the biggest bank in a country known for its banking stability, will take $5.3 billion from the government and lay off $60 billion in bad assets to the country's central bank.

• Leaders of the 27-member European Union prepared to call for a coordinated supervision of the bloc's financial system and a crisis unit to help manage financial turmoil, Reuters reported. The leaders, meeting in Brussels, also said an international summit later this year should take quick steps on standards of regulation and transparency in the world banking and investing.

Earlier in the week, European shares rose on optimism that bank rescue plans by Britain, Germany, France and the United States would stave off a global financial meltdown. But they haven't staved off worries that world economies are slipping into recession.

The latest bout of selling was stoked by a record percentage fall on Wall Street Wednesday after weaker-than-expected U.S. retail sales data and a downbeat assessment from the U.S. Federal Reserve indicated that the world's largest economy is already, or about to fall, into recession.