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Global markets fall, US markets recover, leaving investors jittery

Global markets fell for the eighth day on Friday, while the US markets recovered from Thursday's plummet. As global markets drop, fear grows that the global economy could slip into another recession.

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U.S. Treasury debt prices fell after the data, reversing some of the gains made in Thursday's panic of risk-averse trading. The 10-year Treasury notelost 1-5/32, to yield 2.54 percent, up from 2.41 percent at Thursday's close.

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The Dow Jones industrial average was up 101.83 points, or 0.89 percent, at 11,485.51. The Standard & Poor's 500 Indexwas up 6.44 points, or 0.54 percent, at 1,206.51. The Nasdaq Composite Indexwas down 8.74 points, or 0.34 percent, at 2,547.65.

European stocksfell 1.8 percent to end at 975.02, their biggest weekly decline in nearly three years after hitting their lowest in a year.

Industrial commodities were also hit. Three-month copper fell 2.6 percent to $9,114 a tonne, the lowest since June 29. It lost 1.9 percent in the last session. The Reuters-Jefferies CRB index, a global commodities benchmark, fell to a seven-month low as raw materials markets experienced one of their biggest sell-offs since the financial crisis.

All eyes on Europe

Apart from signs that the U.S. and global economies are weakening despite record low interest rates and the pumping of liquidity into the system, the focus was clearly on Europe, where bond yields in Spain and Italy have been blowing out, threatening the same kind of refinancing problems that have already slammed Greece, Ireland and Portugal.

The European Central Bank disappointed investors Thursday by buying Irish and Portuguese bonds but not Italian or Spanish debt.

``Would the ECB please get serious?'' Berenberg private bank said in a note. ``We need a circuit breaker to stop the vicious circle in which fear feeds on fear.'' Jane Foley, senior currency strategist at Rabobank, said, ''The Swiss National Bank is caught between a rock and a hard place. It's difficult to see the franc being anything but well bid in the current environment.''

The ECB bought Portuguese and Irish government bonds, slightly easing pressure on Italian and other euro-zone peripheral debt, which had earlier offered euro-era high premiums over less risky Germany.

But Italian 10-year government bond yields rose above their Spanish equivalent.

Italy has emerged as the market's major concern after a rescue deal that was intended to stop the spread of the crisis failed to convince investors it had the firepower to ease pressure on the vast Italian bond market.


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