Asian stocks under pressure but rebound from early fall 
 
 Nikkei 225 Index value change % 13774.54 + +185.51 + +1.37 
 
 Asian markets remained under pressure on Tuesday after Wall Street posted its biggest declines since late 2008. 
 
 Falls of as much as 10% were seen in early trading, and Japan's Nikkei 225 index closed 1.7% lower, with South Korea's Kospi down 3.6%. 
 
 However, by the end of Asian trading, some markets had rebounded, while others pared losses. 
 
 Analysts said that a number of stocks had lost so much in recent sessions that they looked like good value again. 
 
 "Fear and anxiety ruled the morning session, with broad based capitulation giving way to some mild buying and serious short covering this afternoon," Ben Potter of IG Markets in Melbourne said in a research note. 
 
 The early declines on Tuesday were triggered by worries that a recession in US would hurt Asia's export-led economies. 
 
 On Monday, the Dow Jones stock index dropped 5.6% in New York despite US President Barack Obama trying to reassure investors. 
 
 "You have the onset of fear in the market. There are a lot of things that don't make sense," Peter Esho, chief market analyst at City Index, told the BBC. 
 
 Sharp falls 
 
 Asian markets were in a tailspin early on Tuesday, with some seeing their value drop to its lowest levels in many months. 
 
 Japan's Nikkei 225 fall below 9,000 points for the first time since the country was hit by a deadly earthquake and tsunami on 11 March. It closed at 8,944.48. 
 
 South Korea's Kospi index saw trading suspended briefly, dropping nearly 10% early on Tuesday. Hong Kong's Hang Seng, which closed down 2.3% declined as much as 7% at one point. 
 
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 However, the late rebound in many prices meant that Australia's S&P/ASX 200 finished up 1.2%, while Taiwan's stock index ended little changed. 
 
 Analysts warned that markets may remain under pressure in coming days as a number of issues have created the current market pessimism. 
 
 European markets continued the global decline when they opened on Tuesday. 
 
 London's FTSE 100 index fell 4.1%, Germany's Dax is down 5.7% and France's Cac has dropped by 2.4%. Bank shares are among the worst hit with RBS down 10%, Barclays falling 7.5% and HSBC 6.9% lower. 
 
 At the heart of the sell-off is the fear that ongoing debt problems in the US and Europe will slow economic growth and dent corporate profits. 
 
 Continue reading the main story “ Start Quote I'm surprised how far it has fallen in all markets, this is panic” End Quote Jeremy Friesen Societe Generale 
 
 On top of that, on Friday the US had its triple A credit rating cut by Standard and Poor's for the first time in history, adding to the sense of gloom surrounding the world's biggest economy. 
 
 "What's rocking the market is a growth scare," said Kathleen Gaffney of Loomis Sayles. 
 
 She said investors were concerned about "how Europe and the US are going to work their way out of a high debt burden" if the global economy slows. 
 
 Broader issues 
 
 Other asset classes were also impacted on Tuesday. Crude oil prices continued to slide amid concerns that demand would wane in coming months. 
 
 Analysts said just like stock markets, the fall in oil prices was being driven by fear. 
 
 "I'm surprised how far it has fallen in all markets, this is panic," said Jeremy Friesen, a commodity strategist at Societe Generale in Hong Kong. 
 
 "Demand hasn't pulled back in the past day, it's just speculation that it will," he added. 
 
 Gold, meanwhile, hit a new record as investors looked for assets that are considered to be less risky. The Swiss franc also gained. 
 
 Asian markets saw panic selling early in the day but recovered some of the losses by the end of trading 
 
 Analysts said that while economies in Asia had been growing robustly and the outlook for the region remained positive, a slowdown in the US and Europe could hurt growth significantly. Not least because the stock market slump may put off consumer and corporate spending. 
 
 Rajiv Biswas of IHS Global Insight told the BBC that investors were also worried that the cut in the US credit rating would force a serious reining in of budgetary spending. 
 
 "That will be a big drag on growth," he said. 
 
 Mr Biswas added that there was "little doubt" that a slowdown in the US and Europe would hurt growth and trade in Asia. 
 
 Analysts said that Asian economies may now have to revise their own economic projections as a result. On Monday, Singapore cut its growth forecast for this year to between 5-6%, down from 5-7%. 
 
 "The discussion now in Asia is to have a look at growth assumptions and perhaps even to revise numbers that could be a little too optimistic in light of what is happening in the markets," said City Index's Mr Esho. ||||| Tap for Slideshow Photographer: Scott Eells/Bloomberg Traders work on the floor of the New York Stock Exchange on Aug. 9, 2011. Close Photographer: Scott Eells/Bloomberg Traders work on the floor of the New York Stock Exchange on Aug. 9, 2011. Traders work on the floor of the New York Stock Exchange on Aug. 9, 2011. Close Photographer: Stan Honda/AFP/Getty Images Traders watch prices after the announcement that the U.S. Federal Reserve Bank will leave interest rates... Read More Traders watch prices after the announcement that the U.S. Federal Reserve Bank will leave interest rates 'exceptionally low' until 2013, on the floor of the New York Stock Exchange on August 9, 2011. Close Photographer: Scott Eells/Bloomberg The Federal Reserve pledged for the first time to keep its benchmark interest rate at a record low at least through... Read More The Federal Reserve pledged for the first time to keep its benchmark interest rate at a record low at least through mid-2013 in a bid to revive the flagging recovery after a worldwide stock rout. Close Photographer: Mario Tama/Getty Images Traders work on the floor of the New York Stock Exchange in morning trading on August 9, 2011. Stocks opened higher... Read More Traders work on the floor of the New York Stock Exchange in morning trading on August 9, 2011. Stocks opened higher following yesterday's 600 point drop. Close 
 
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 U.S. stocks jumped the most in more than two years, rebounding from the worst drop since 2008, and 10-year Treasury yields touched a record low as the Federal Reserve vowed to keep interest rates near zero through mid-2013. The dollar weakened and the Swiss franc rose the most since at least 1971. 
 
 The Standard & Poor’s 500 Index jumped 4.7 percent to 1,172.53 at 4 p.m. in New York, its biggest gain since March 2009, after tumbling 6.7 percent yesterday. The 10-year Treasury yield fell as much as 28 basis points to 2.03 percent before trimming its decline. The Dollar Index slid 1.2 percent, its biggest drop since October, while the Swiss franc strengthened as much as 6.5 percent to a record $1.4099. 
 
 In pledging to keep its benchmark rate at an all-time low, the Fed also discussed a range of policy tools to bolster the economy, saying it is prepared to use them “as appropriate.” The statement fueled speculation the central bank may consider a third round of quantitative easing through bond purchases to revive a recovery that’s “considerably slower” than anticipated. 
 
 “The Fed is clearly setting up a situation that could offer them the potential to do something significant, if necessary,” Bruce McCain, who helps oversee $22 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland, said in a telephone interview. “That could be viewed as a positive,” he said. “People are starting to realize that what we’ve had in the market was an overreaction.” 
 
 Rebound After Rout 
 
 U.S. stocks rebounded from a rout that wiped out $1 trillion yesterday in the first trading session after the government was stripped of its AAA rating at S&P. The S&P 500 sank 11 percent in the previous three days and started today trading at 12.3 times reported earnings, compared with its average of 16.4 since 1954, according to data compiled by Bloomberg. 
 
 The MSCI All-Country World Index rose 2.1 percent for its biggest gain of the year, rebounding from a drop of as much as 2 percent earlier today that threatened to extend declines from this year’s high in May to 20 percent or the threshold for a bear market. The index started the U.S. session valued at about 12.1 times profits, down from 21 in 1995..The MSCI Emerging Markets Index pared today’s drop to 2.2 percent after tumbling as much as 4.4 percent. 
 
 Dow Rallies 
 
 The Dow Jones Industrial Average rallied 429.92 points, or 4 percent, to 11,239.77 for the biggest percentage gain since the month the bull market began in March 2009. The Dow’s advance today was the 10th largest point-gain in the history of the index, according to Bespoke Investment Group LLC. All 30 stocks gained at least 0.8 percent. 
 
 Laszlo Birinyi, one of the first investors to recommend buying when the bull market began in 2009, said the Standard & Poor’s 500 Index will continue its ascent, though possibly not to the level he had predicted. 
 
 “The bull market is intact, and while our ‘target’ of 1,450 in mid-2012 is admittedly a bit shaky, our more important conclusion that a rational, disciplined portfolio can attain a 10 percent plus return in 2011 is not,” Birinyi, of Westport, Connecticut-based research firm Birinyi Associates Inc., wrote in a note today. 
 
 Financial Shares 
 
 Financial shares in the S&P 500 led today’s advance, surging more than 8.2 percent as a group for the biggest rally since May 2009 and recovering from yesterday’s two-year low. Bank of America Corp. surged 17 percent and Hartford Financial Services Group Inc. climbed 16 percent to lead gains among 80 of 81 banks, insurers and investment firms in the index. 
 
 The Fed’s statement represents the biggest effort since November to spark the U.S. economy and revive confidence while stopping short of initiating a third round of large-scale asset purchases. Chairman Ben S. Bernanke and his colleagues acted after reports showed the economy was slowing and an unprecedented downgrade to the U.S. credit rating sent stocks tumbling from Sydney to New York. Three members of the policy committee dissented, preferring to maintain the pledge to keep rates low for an “extended period” without a specific timeframe. 
 
 The central bank’s plan to keep the federal funds rate in its range of zero to 0.25 percent for two more years is a “major policy change,” according to Augustine Faucher, director of macroeconomics at Moody’s Analytics in West Chester, Pa. 
 
 Fed ‘Is Concerned’ 
 
 “By providing a more explicit time line for raising rates, the Fed is telling markets it is concerned about recent economic weakness and the potential for a near-term contraction, and is dedicated to spurring stronger economic growth, Faucher wrote in a note. 
 
 MEMC Electronic Materials Inc. climbed 19 percent for the biggest increase in the S&P 500. Four executives, including Chief Executive Officer Ahmad Chatila, bought a combined 87,500 shares of the second-largest U.S. manufacturer of polysilicon on Aug. 5, according to regulatory filings. 
 
 Treasury note and bond yields plunged after the Fed’s statement was issued at 2:18 p.m. New York time, before paring the declines later in the afternoon. 
 
 Two-year Treasury yields also touched a record low, dropping as much as 10 basis points to 0.16 percent before trading at 0.20 percent. Thirty-year rates were little changed at 3.65 percent. The Treasury’s sale of $32 billion in three- year notes drew stronger-than-average demand in the first note sale since the U.S. debt rating was cut. 
 
 Moody’s, Fitch 
 
 Moody’s Investors Service reiterated yesterday that it affirmed the U.S. government’s top Aaa ranking because the dollar’s status as the main reserve currency allows it to support higher debt levels than other countries. Fitch Ratings affirmed its AAA grade for the U.S. last week. The U.S. AA+ rating at S&P is still higher than Japan or China. 
 
 European shares recovered from early losses amid speculation that the Fed would bolster investor confidence. The Stoxx Europe 600 Index snapped a seven-day slump and rebounded from a two-year low, climbing 1.4 percent after plunging 5.1 percent in early trading. Basic-resource stocks rebounded from an 11-day slide, led by gains at Antofagasta Plc. Thomas Cook Group Plc, Europe’s second-largest tour operator, surged 17 percent. RWE AG, Germany’s second-biggest power company, led utilities lower after profit fell. 
 
 Italian Bonds 
 
 The yield on Italy’s 10-year note fell 11 basis points to 5.18 percent, after dropping 81 basis points yesterday. The extra yield investors demand to hold Italian 10-year securities instead of benchmark German bunds dropped 21 basis points to 281 basis points today, the least since July 22. The European Central Bank bought Italian and Spanish bonds for a second day, people familiar with the transactions said. Spain’s 10-year yield fell eight basis points to 5.08 percent today, extending yesterday’s slide. 
 
 Four years after BNP Paribas SA marked the start of a financial crisis by freezing withdrawals from investment funds because it wasn’t able to value subprime mortgage bonds, a reduction of the U.S. debt rating and escalating sovereign woes in Europe show credit markets are still fragile. The Markit iTraxx Crossover Index of credit-default swaps on mostly junk- rated European companies increased for an eighth day, adding 18 basis points to a mid-price of 592 today. 
 
 The S&P GSCI index of 24 commodities lost 1 percent. Oil lost 2.5 to $79.30 a barrel, the lowest level since September. Gold futures pared gains after adding as much as 4.1 percent to a record $1,782.50 an ounce. 
 
 To contact the reporters on this story: Michael P. Regan in New York at mregan12@bloomberg.net; Rita Nazareth in New York at rnazareth@bloomberg.net 
 
 To contact the editor responsible for this story: Michael P. Regan at mregan12@bloomberg.net
– Get ready for another wild ride. Asian markets recouped some of their losses after scary declines early today, but European stocks were being buffeted a day after US markets suffered their biggest drop since 2008. By mid-morning London time, Germany's DAX was down 5.6%, France's CAC-40 had dropped 3.5% and the leading index of British stocks was down 4.1%. It was the eighth straight day European stocks have fallen, the longest losing streak since 2003, notes Bloomberg. US stocks were poised for more dips as Standard & Poor's 500 Index futures slipped .6%. "It's still very hard to predict how the US market will do," one analyst told AP. "When the dust settles, if the situation doesn't get worse in the US or Europe, the situation will rebound. But the US has to stabilize. Another analyst told the BBC: "You can't control it. You have the onset of fear in the market." There's "probably as much uncertainty as we've seen since 2008," said another analyst. "There's a feeling that fiscal austerity is coming at the worst possible time."