Turmoil in stock markets

Instability in the stock markets has continued, despite better-than-expected US jobs figures. Investors’ confidence took another hit, owing to growing concerns about the eurozone debt crisis and the weak economic recovery in the US and Europe. European markets closed sharply lower for the second day, but US shares recovered to close slightly higher.

Meanwhile, a report suggests credit rating agency Standard and Poor’s (S&P) will downgrade US government debt. US network ABC reported that Washington expected S&P to cut its AAA rating following the protracted and acrimonious process of raising the country’s debt ceiling. Any downgrade would further erode global investors’ confidence in the US economy. S&P has declined to comment on the report.

Earlier, a decline in the US jobless rate caused the US markets to open higher and gave temporary relief to European indexes. But London’s FTSE and Frankfurt’s Dax both closed down about 2.7 percent. US stocks recovered from a late-morning slump to end the day slightly higher.

At a specially-convened press conference after European markets closed, Italian Prime Minister Silvio Berlusconi said that G7 finance ministers would meet within days to discuss measures to combat the eurozone debt crisis, which is the main cause of the growing turmoil in global financial markets. He also said that Italy would speed up measures to balance its budget by 2013, a year earlier than planned, and work to amend the Italian constitution to make balanced budgets a requirement for future governments. He also announced some labour market reforms.

European markets had been down by as much as 4 percent in the morning, before recovering, and then lurching back again by the end of the session. “Failed rallies are not a good sign,” said markets analyst Louise Cooper, from BGC Partners.“Investors are just really, really nervous, thinking what can be done to get us out of this hole, and there are not many answers,” she told BBC radio.

The FTSE 100 closed down 2.7 percent, with banking shares such as Lloyds, RBS and Barclays suffering falls as large as seven percent. The London market has now lost 10 percent in the past week.In Germany the Dax closed down 2.8 percent, while the French Cac 40 ended just over 1 percent down.US stocks ended the session up 0.5 percent as investors recovered their poise following heavy falls in late morning trading.Investors are also worried about the state of the US economy after recent data on economic growth and consumer spending raised questions about the strength of the recovery. Some analysts have even suggested the US could be heading for another recession.

Syria: New protests after crackdown in Hama

Tens of thousands of people have protested across Syria, days after the bloody crackdown on the city of Hama where the opposition had taken control.

A video, said to be of Damascus, showed crowds in a central district chanting: “Hama, we are with you until death” and “[President] Bashar [al-Assad] leave”.

Security forces shot dead at least 13 protesters on Friday, reports say.

The US, German and French leaders have accused Assad of “indiscriminate” violence against civilians.

The White House said President Barack Obama, Chancellor Angela Merkel of Germany and French President Nicolas Sarkozy had spoken in separate telephone calls, and warned of unspecified new measures against the Syrian leader.

In a broadcast from Hama, Syrian state TV said the city was under government control. Hama residents and human rights groups accuse the army of killing more than 100 civilians in a bombardment of the city, which has become a focus of the protests against Assad’s rule.

As many as 2,000 people may have been killed by security forces since opponents of President Assad’s autocratic rule took to the streets in March.

Protesters were inspired by the successful uprisings in Tunisia and Egypt. Assad has promised reforms, but blames the violence on “armed criminal gangs” backed by unspecified foreign powers.

Access to events in Syria has been severely restricted for international journalists and it is rarely possible to verify accounts by witnesses and opposition activists.

Activists had called for more protests after prayers on Friday, with one web user posting a message saying: “God is with us, are you?”

In another district of the capital, Qadam, protesters carried a banner reading: “Bashar is slaughtering the people and the international community is silent.”

Security forces opened fire with live ammunition and tear gas in several cities, activists said.

At least 10 people were killed in the Damascus suburbs of Irbin, Moaddamia and Dumeir, and three in the city of Homs. Abdel Karim Rihawi, head of the Syrian League for the Defence of Human Rights, told AFP news agency that 30,000 people had marched in the city of Deir al-Zour despite extreme heat.

Numbers were down on previous Fridays, when hundreds of thousands turned out for protests. Correspondents say this is probably because it was the first Friday in the holy month of Ramadan, when Muslims fast from dawn until dusk and go outside less.