World stocks were mixed Wednesday as a higher opening on Wall Street helped Europe's markets recoup earlier losses as stronger technology shares offset some of the ongoing gloom about banks.
But even as President Barack Obama assumed power Tuesday vowing to "begin the work of remaking America," which includes a massive economic stimulus package, investor sentiment was fragile with fears that mounting bank losses could deepen the world economic downturn.
In Britain, where record losses at Royal Bank of Scotland have raised concerns of a nationalization of more banks, the benchmark FTSE 100 index closed down 31.52 points, or 0.8 percent at 4,059.88. Germany's DAX was up 21.30 points, or 0.5 percent, at 4,261.15, while France's CAC 40 dropped 19.71 points, or 0.7 percent to 2,905.57. All three indexes were at least 2 percent in the red in earlier trading following heavy losses on Wall Street in the previous day's session.
U.S. stocks recovered some of those losses Wednesday, with the Dow Jones industrial average up 64.76 points, or 0.8 percent, at 8,013.85, in midday trading in New York, and the broader Standard & Poor's 500 index 7.94 points, or 1.0 percent, higher at 813.16.
Technology stocks led Wednesday's rebound on Wall Street after IBM said late Tuesday that it expects to earn $9.20 per share this year _ 45 cents a share better than the average analyst estimate, according to Thomson Reuters. IBM also said its fourth-quarter profit jumped 12 percent, easily topping analysts' estimates.
Earnings reports will continue to be the market's focus Wednesday, and for the next few weeks. Apple Inc. is set to report its fiscal first-quarter results after the market closes.
With company and economic prospects seeming to darken by the day, hopes are fading the new U.S. administration can bring about a quick recovery in the world's largest economy with the reconstruction promised in Obama's inaugural speech.
"While it was a great day to hope, and fun to watch a part of history, investors are very much in tune to the reality that there is not a lot this new president can do to help Asia, or the world, let alone the United States, in the very near term," said Kirby Daley, senior strategist at Newedge Group in Hong Kong.
Corporate news was mixed Wednesday, with technology shares offsetting steep declines in bank stocks.
Sweden's LM Ericsson posted a 31 percent drop in fourth quarter profits and announced 5,000 job cuts, but shares rose because the performance was better than market forecasts.
Among banks, Britain's Barclays PLC was down a massive 11 percent on fears it may have to be bailed out by the British government and, like Royal Bank of Scotland, become partly nationalized.
In Germany, the lender Hypo Real Estate said it would request an extra euro12 billion in loan guarantees from the state to survive the credit crunch. Better news came in France, where Societe General said it would make a euro2 billion profit in 2008 despite the rocky year.
In Britain, official data showed unemployment reached a near 10-year high of 6.1 percent, while the Bank of England governor sounded a gloomy note in a speech late Tuesday, suggesting interest rate cuts may not be enough to help the economy. In fact, the government has this week cleared the central bank to buy assets as a policy tool in its latest bailout of the banking sector.
Earlier in Asia, Japan's Nikkei 225 closed down 2 percent at 7,901.64, while Hong Kong's Hang Seng Index shed 2.9 percent to 12,578.58.
Benchmarks in South Korea and India retreated about 2 percent or more, Singapore's index was down 1.6 percent and Australia's stock measure lost 1 percent. Shanghai's main stock gauge was off around 0.5 percent, while Taiwan's stock measure inched modestly higher.
Joseph Yam, head of Hong Kong's de facto central bank, warned of a second round in the financial crisis.
"The effect of this round will be even more widespread and have a huge impact on the world's financial markets," said Yam, who leads the Hong Kong Monetary Authority. "We have a difficult year ahead."
Oil prices rose slightly, with light, sweet crude for March delivery up 71 cents to $41.55 in European trade.
The pound was near 7 1/2 year lows against the dollar at 1.3754. The dollar traded higher against the yen, at 87.94 yen compared with 89.87 yen late Tuesday. The euro was steady at $1.2892.
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AP Business writers Carlo Piovano in London and Jeremiah Marquez contributed to this report.
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