Wall St. Is Mixed Amid Global Fears of Recession

United States markets were mostly lower in early trading on Monday after a sharp drop in Japan overnight. Japanese shares underperformed global markets because of figures showing the country unexpectedly slid into recession in the third quarter of the year.

KEEPING SCORE The Dow Jones industrial average fell 0.08 percent and the Standard & Poor's 500-stock index was down 0.08 percent. The Nasdaq composite index edged down 0.01 percent.

EUROPEAN MARKETS After the sharp 3 percent fall in Tokyo's benchmark Nikkei index, European shares started the new week in retreat. In Germany, the DAX fell 0.3 percent and in France, the CAC 40 lost 0.4 percent. The FTSE 100 was down 0.2 percent in Britain.

JAPAN WOES The main talking point across financial markets was the news that Japan's economy, the world's third-largest, turned in a worse-than-expected performance in the July-September period. Official figures showed the economy contracted at a 1.6 percent annual pace in the July-September quarter, confounding expectations that it would rebound after a big 7.1 percent drop the quarter before. A recession is usually defined as two straight quarters of decline. Many blame a new sales tax in the country for the return to recession.

GLOBAL UNCERTAINTY With Japan in recession and much of Europe stagnating, there are growing concerns over the state of the global economy, which is increasingly being supported by the United States. Over the weekend, leaders from the 20 top developed and developing countries - the so-called G-20 - acknowledged as much and pledged to work to increase growth. British Prime Minister David Cameron even warned that 'red warning lights' are once again flashing over the global economy.

ANALYST TAKE 'Time will tell whether this G-20 meeting is any more successful than previous ones, but if history has taught us anything in recent years, it pays to keep expectations, to coin a phrase, fairly anchored,' said Michael Hewson, chief market analyst at CMC Markets.

DRAGHI IN FOCUS The European Central Bank president, Mario Draghi, is likely to be questioned later on what the bank can do to shore up the recovery, after figures last week showed the 18-country eurozone grew at a muted quarterly rate of 0.2 percent in the third quarter. His comments to the European Parliament will be closely monitored amid some expectations in the markets that the central bank is ready to back a monetary stimulus similar to those enacted by the Federal Reserve and the Bank of England. The bank's next meeting is in early December.

CHINA LINK Shanghai shares were propelled higher for most of the day by the introduction of a cross-border trading link with Hong Kong, but after the daily limit for Hong Kong investors was exhausted they joined the global trend and sank into the red. The Shanghai-Hong Kong Stock Connect opens the way for greater investor access to each other's exchanges but interest was clearly greater in shares listed on the mainland, where access to outsiders has been tightly restricted. Until now only a small group of designated fund managers have been granted a quota to buy China shares.

ASIA'S DAY Japan's woes weighed on most markets in Asia. In Hong Kong, the Hang Seng lost 1.2 percent. The Shanghai Composite Index lost 0.2 percent in China. In Australia, the S.&P./ASX 200 lost 0.8 percent.

CURRENCIES Despite the Japan recession news, the yen was little changed, with the dollar flat at 116.22 yen. The euro was down 0.2 percent at $1.2497.

ENERGY Concerns over the global economy were dominant in the oil markets, where a barrel of benchmark United States crude was down 96 cents at $74.94.

BONDS Bond prices rose. The yield on the 10-year Treasury note fell to 2.31 percent.

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