World stocks slide on Citigroup jobs cull

LONDON - U.S. and European stock markets fell Monday after Citigroup Inc. announced that it would cut another 53,000 jobs around the world in the coming quarters to deal with the fallout from the financial crisis. Asian shares were steady earlier.

The Dow Jones index of leading U.S. shares opened down 159.62 points, or 1.9 percent, at 8,337.69 as investors found little solace in the Citigroup jobs cull or in a better-than-expected 1.3 percent monthly bounceback in U.S. industrial production in October.

In Europe, the FTSE 100 index of leading British shares was 80.19 points, or 1.9 percent, lower at 4,152.78, while Germany's DAX was down 103.03 points, or 2.2 percent, at 4,607.21. The CAC-40 index in France was 72.91 points, or 2.2 percent, lower at 3,218.56.

The latest bout of jitters were stoked by the announcement from Citigroup, which had already cut around 23,000 jobs this year. The banking giant, which lost around $20 billion last year, saw its share price fall 42 cents, or 4.4 percent, to $9.10 in the wake of the news.

On top of Citigroup, the market was assessing more bleak corporate earnings reports.

Retailer Lowe's Cos. said its third-quarter profit fell 24 percent, better than expected, but it predicted a fourth-quarter profit for 8 cents to 16 cents per share - below the average analyst forecast. Target Corp. also posted a 24 percent profit decline, citing lower sales at established stores.

"Stock markets have started the week fairly downbeat; there's no sign of much relief in the economic crisis and financial companies are in the midst of a pretty savage restructuring," said Neil Mackinnon, chief economist at ECU Group.

Investors were also nervously waiting to see whether the troubled U.S. automakers would get a bailout. Senate Democrats, who plan to introduce legislation Monday, want to use part of the $700 billion Wall Street bailout to help prop up Detroit's Big Three carmakers: General Motors Corp., Ford Motor Co. and Chrysler LLC. A vote was expected as early as Wednesday.

The principal focus of attention for markets as the new week kicked off was the meeting of the G-20 world leaders in Washington. Though they provided a symbolic show of unity between rich and emerging nations, few concrete reform measures were announced.

Detailed plans for reform of the IMF and other organizations will be discussed at a follow up meeting scheduled for the spring in London and pledges on cooperation over the use of government spending or tax cuts were loosely worded in the summit's communique.

"Equity markets appear unimpressed with the outcome, even given that expectations were extremely low ahead of the meeting," said Hans Redeker, an analyst at BNP Paribas.

Earlier, Asian markets closed relatively flat despite confirmation Japan slipped into recession in the third quarter of the year for the first time since 2001.

Japan's benchmark Nikkei 225 stock average closed 60.19 points higher, a 0.7 percent gain, at 8,522.58 after trading as high as 8767.98 and Hong Kong's Hang Seng index gave up early gains to dip 0.1 percent to 13,529.53.

Japan became the latest country to officially enter a recession. Official figures showed that the world's second-largest economy shrank an annual pace of 0.4 percent in the July-September quarter, meaning the country now joins the 15 nation euro-zone as officially in recession, defined as two straight quarters of contraction.

But with many companies having already announced significant downgrades to earnings forecasts, the Japanese market took the news of a second straight quarter of economic contraction in stride.

Elsewhere in Asia, mainland China's Shanghai Composite index rose 2.2 percent, but Australia's main index slid 2.5 percent and India's Sensex tumbled 4.4 percent. India's Sensex was down 0.2 percent.

Oil prices pushed back above $58 a barrel with light, sweet crude for December delivery up $1.19 to $58.23. The contract fell $1.20 Friday to settle at $57.04.

The dollar was 0.4 percent lower at 96.63 yen, while the euro was up 0.3 percent at $1.2642.