The Australian stocksmarket will hopefully have a better day today after Wall Street shook off the blues from Europe and Asia to close quietly with small gains.
It was a gentle bear market bump rather than anything significant but it should help calm nervy investors here and in Asia who took fright at the worsening state of global credit markets.
Wall Street had fallen in earlier trading but sentiment turned during the day.
Oil stock rose on Wall Street after oil prices rose for a third day in a row, closing at $US93.59, and other commodities, such as wheat and copper also firmed.
The Standard & Poor's 500 Index added 7.84 points, or 0.6% to 1,339.13 after earlier falling as much as 0.8%.
The Dow average gained 57.88, or 0.5%, to 12,240.01, erasing an early drop of as much as 113 points and rebounding from the worst week in almost five years.
Nasdaq was up 15.21, or 0.7%, to 2,320.06.
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Earlier it was a tough day yesterday for markets in Asia and Europe.
In Europe the Stoxx 600 Index sank 0.9% to 312.59; the Stoxx 50 lost 1% and the Euro Stoxx 50, a measure for the companies in the euro zone, eased 0.6%. The Stoxx 600 has lost 14% and national indices fell in all of the 18 markets in western Europe except for Austria and Denmark. Germany's DAX lost 0.4%. France's CAC 40 fell 0.6%. The U.K.'s FTSE 100 slid 1.3%.
Europe was lower on fears about the credit crunch and the impact of the US slowdown.
The MSCI Asia-Pacific excluding Japan Index lost 2.6%.
South Korea's Kospi dropped 3.3%; India's Sensex Index slumped 4.8% as the $US3 billion flotation of Reliance Power, the biggest initial public offering of the year so far, slumped on its first day of trading. .
Hong Kong, Singapore and Seoul reopened following the lunar new year holiday break sharply lower. The mood was further dampened by the G-7 meeting at the weekend where finance ministers suggested that the worst of credit crisis was far from over and by a downbeat end to the week in New York on Friday.
Hong Kong saw the Hang Seng index close 3.6% lower at 22,616.11. Trading was thin. Chinese shares in Hong Kong tracked the fall in their American depository receipts in New York on Friday.
Singapore meanwhile lost 2.3% and Manila slid by 1.9%.Tokyo reopens later today and Shanghai and Shenzhen tomorrow.
The Australian share market closed just over two per cent lower after the Reserve Bank of Australia (RBA) warned that more interest rate rises were inevitable.
The market dropped from around a loss of 40 points just before the announcement at 11.30 am, to the close at 4.15 pm.
Banks led the sharp sell-off, as they did elsewhere in Asia and Europe.
It was a sour day's trading in fact with numerous companies punished by investors, despite some of them reporting solid earnings.
At the close, the ASX/200 was 120.4 points, or 2.13%, lower at 5537.6, while the All Ordinaries lost 120.8 points, or 2.11% to 5603.1.
The National Australia Bank shed $1.43 to $32.00, the ANZ lost 80 cents to $24.80, Commonwealth Bank dropped $1.39 to $48.75 and Westpac gave up 67 cents to $24.30.
Despite good sales and earnings forecasts from David Jones retailers were weaker.
David Jones shed 17 cents to $4.00 despite lifting its first-half profit guidance to between $87.5 million and $89 million.
Woolworths lost 89 cents to $28.10, Harvey Norman dropped 24 cents to $4.84 and Wesfarmers, the owner of Australia's second largest retailer – Coles – fell $1.31 to $37.72. That reversed much of Friday's strong rise for the stock.
Media also took a hit, with Consolidated Media Holdings losing seven cents to $4.41, Fairfax off 12 cents to $4.05, News Corp falling 66 cents to $22.32 and its non-voting shares dipping 59 cents to $21.76.
Debt collection agency Credit Corp retreated $3.08 or a massive 77.12% to 91 cents after the company slashed its full-year profit guidance by up to 50%.
It was one of the more spectacular share price collapses, matching those from Centro Properties in December and the Allco companies last month.
Ansell jumped 40 cents to $11.90 after the company upgraded its earnings guidance for fiscal 2008, following a 28% rise in first half earnings.
United Group shed $3.60, or 24.8%, to $10.89 after the engineering and property management firm booked a first half profit of $51.48 million, which was below analysts' expectations, but still up 40%.
ABB Grain Ltd., Australia's largest barley exporter, also fell sharply on a downgrade by Austock Securities.
Austock said full-year profit earnings could be 34% lower than previously estimated because of lower sales and margins.
ABB Grain shares fell 55 cents, or 6.4%, to A$8.00, its biggest fall since October 10, 2002.
Securities in three separate Rubicon listed property funds fell sharply on after their besieged manager, Allco Finance Group Ltd, went into a trading halt. An announcement is due by tomorrow. Allco is due to report interim earnings Friday.
Energy was weaker, despite higher oil prices. Woodside fell 93 cents to $43.92, Santos five cents to $13.35 and Oil Search six cents to $3.82.
Woodside agreed to buy Shell Australia's equity share in oil fields on Western Australia's North West Shelf for almost $US400 million ($446.6 million).
The market didn't like that either.
