A man takes a nap at a quiet brokerage house in Nanjing in east China's Jiangsu province, Thursday, Oct. 20, 2011. World stock markets fell Thursday over renewed fears that European leaders are struggling to agree on a rescue plan to resolve the continent's debt crisis. In mainland China, the Shanghai Composite Index fell 1.9 percent to 2,331.37. (AP Photo) CHINA OUT
A man takes a nap at a quiet brokerage house in Nanjing in east China's Jiangsu province, Thursday, Oct. 20, 2011. World stock markets fell Thursday over renewed fears that European leaders are struggling to agree on a rescue plan to resolve the continent's debt crisis. In mainland China, the Shanghai Composite Index fell 1.9 percent to 2,331.37. (AP Photo) CHINA OUT
People walk past a screen displaying the Hang Seng stock index in Hong Kong Thursday, Oct. 20, 2011 as world stock markets fell Thursday over renewed fears that European leaders are struggling to agree on a rescue plan to resolve the continent's debt crisis. Hong Kong's benchmark Hang Seng slid 1.8 percent to 17,983.10. (AP Photo/Vincent Yu)
LONDON (AP) ? Seesawing expectations of this weekend's summit of European leaders remained the main driver in markets on Thursday, with investors growing skeptical again about governments' ability to agree on a strategy to deal with the debt crisis.
Though stocks in Europe fell following an earlier retreat in Asia, the losses were limited as investors weigh every rumor and report about the likely make-up of a deal that may emerge at the Sunday meeting.
On Thursday, concerns resurfaced that discussions over expanding the bailout fund, recapitalizing the banks and the terms of a second rescue package for Greece are proving more difficult than expected. France, Europe's second biggest economy, is thought to be wary of committing too much money in case it loses its cherished triple A credit rating.
Over the past few weeks, stocks recovered a chunk of their losses for the year on expectations that the 17 countries that use the euro were preparing a three-pronged solution to the debt crisis. That would include measures to boost the firepower of the bailout fund, a recapitalization of a large part of the banking sector and a plan to get the banks to take a bigger hit on their Greek debt holdings.
This week, though, sentiment has oscillated between hope and skepticism. A general strike in Greece, which has paralyzed the country and seen outbreaks of violence, is doing little to convince investors that the government will be able to push through its reforms and austerity measures.
"Financial markets are not normally known for their patience and yet for the time being, they are giving our political leaders and central bankers that most precious of commodities, time," said Louise Cooper, markets analyst at BGC Partners. "I would say that the smallest event can cause everyone to head for the exit and predicting what event will cause panic is almost impossible."
In Europe, Germany's DAX was down 0.5 percent at 5,881 while the CAC-40 in France fell 1 percent to 3,125. The FTSE 100 index of leading British shares was 0.7 percent lower at 5,415.
Wall Street was poised to recover some of Wednesday's losses ? Dow futures were up 0.4 percent at 11,493 and the broader Standard & Poor's 500 futures 0.5 percent higher at 1,212.
A raft of U.S. corporate earnings later from the likes of drug company Ely Lily & Co. and telecoms firm AT&T Inc. before the bell could have a bearing on how Wall Street opens.
"There's going to be no shortage of potential to see movements at the stock-specific level on Wall Street," said Yusuf Heusen, sales trader at IG Index. "However, the global ramifications of the eurozone crisis mean that it's arguably going to be difficult for any single market to deliver a meaningful shift in sentiment before we get the next instalment of news ? as opposed to rumour ? from Europe."
The euro was nevertheless faring well, trading 0.4 percent higher at $1.3819.
Earlier, Asian stocks were pummeled, with Japan's Nikkei 225 index losing 1 percent to close at a two-week low of 8,682.15. Hong Kong's Hang Seng slid 1.8 percent to 17,983.10 and South Korea's Kospi tumbled 2.7 percent to 1,805.09.In mainland China, the Shanghai Composite Index fell 1.9 percent to 2,331.37 and the smaller Shenzhen Composite Index plunged 2.9 percent to 974.86.
Oil markets were flat, with benchmark crude for November delivery up 10 cents at $86.39 a barrel in electronic trading on the New York Mercantile Exchange.
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Pamela Sampson in Bangkok contributed to this report.
Associated Pressmeredith kercher meredith kercher waxahachie waxahachie erin burnett four loko michael savage
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