Weak US data, bank bailouts deepen economic gloom

TOKYO: Investors braced for another stormy day on global markets on Friday after gloomy US data, recession fears and more bank bailouts deepened concern about the economic crisis.

Asian stocks limped higher in early trade, recovering from another plunge on Thursday, following a rollercoaster day on Wall Street that saw the Dow leading index end higher after an 800-point swing.

Troubling data surfaced in the US yesterday showing the banking and credit crisis had taken a sharp bite out of the manufacturing sector, raising the odds for a deep and prolonged downturn, analysts said.

"Recession is on its way," warned Carl Weinberg, chief economist at High Frequency Economics, echoing others in his concern for the US economy, the world's biggest.

"The seeds of recession germinated during the (credit) crisis and the likelihood is that most of the world -- although not China -- will be in recession long after the uncertainty about the world's banking sector has dissipated."

Hopes had emerged at the beginning of the week that the worst of the financial crisis might be over after governments worldwide unveiled measures to shore up their weakened banks to prevent a meltdown of the financial system.

Attention is now shifting to the real economy and the prospect of rising joblessness in advanced economies, further defaults on consumer debt and slowing business activity.

Many countries are still putting in place measures to contain the financial crisis that had threatened to sink the global monetary system last week.