Byline: NICK GOODWAY
EUROPEAN stock markets were braced for a torrid day's trading today asthe rising oil price and growing signs that the American economy is weakeningsent Wall Street lower and Asian markets went into freefall.
With the 20th anniversary of the Black Monday stock market crash of 19 October1987 just two days away, traders in London said there is increasing fear acrossthe world that the credit crunch could have far greater long-term effects thanit has had so far.
In the short-term, the price of crude oil rose to new highs, with Brent crudefor November delivery up $1.16 at $84.16. Dealers said only rising oil-companyshares have prevented London's FTSE 100 index falling more sharply in the lastcouple of days.
In early trading today the index of leading UK shares was down 12.4 at 6601.9.
Overnight, Wall Street was hit by worse than expected results from consumergoods giant Johnson & Johnson and much higher bad debt provisions from WellsFargo. The Dow Jones closed down more than 70 points at 13,912.94. Strongresults announced after hours by Intel, IBM and Yahoo could improve matterstoday. US oil futures hit a new high of $88.20 a barrel overnight beforesettling back to $87.61. The price has now risen for six days running and is up44% since the start of the year.
Analysts said the rise has yet to feed through into the wider economy but itcould start to damage consumption.
Drew Matus, senior economist at Lehman Brothers, said: "The real …