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US, Europe Markets Down; US Job Cuts Rise 

U.S. and European stock markets are trading lower, after Asian markets surged. VOA's Kent Klein reports from Washington new figures show U.S. job cuts jumped in October, as hotels, retailers and construction firms saw their business shrink.

Lower share prices in New York represent profit-taking after Tuesday's election-day rally.

In Wednesday's midday trading, the Dow Jones industrial average was down about 203 points, at 9,422. The S&P 500 was down 21 points, or two percent, and the NASDAQ was 41 points, or 2.3 percent, lower.

Europe's major markets each lost about two percent.

London's Financial Times 100 index dropped 105 points, to finish at 4,534. In Paris, the CAC-40 was down 73 points, at 3,600. And the DAX in Frankfurt slid 111 points, to5,167.

Earlier in the day, Asia's markets soared. Japan's Nikkei index gained 4.5 percent, to 9,521, and Hong Kong's Hang Seng was up 3.2 percent, to 14,840.

Several new reports are fueling concern that the United States is in a recession. Two reports show the U.S. economy is losing thousands of jobs. A private employment consulting firm (Challenger, Gray and Christmas) says U.S. employers cut more than 112,000 jobs in October.

The firm's chief executive officer, John Challenger, says that is a 79-percent increase in layoffs from a year earlier, and the highest total in five years.

"We are now seeing much more widespread downsizing," said John Challenger. "Eighteen of the 25 industry categories that we track all now have seen higher layoffs than they saw a year ago."

Challenger says the layoffs are a symptom of the overall credit freeze.

"The economy is slowing, companies cannot get access to their credit lines as easily as they were able to before," he said.

John Challenger says the transportation industry is being especially hard-hit by the job losses.

"It is looking very risky for areas like transportation, which is the largest gainer this year, over 245 percent more cuts this year, because of the high price of energy on top of that credit crisis," said Challenger.

A report from a private research group (the Institute of Supply Management) shows the U.S. service industry, including banks, airlines and restaurants, lost business in October. Job losses and slower spending meant contraction in the service sector, which represents more than 80 percent of the nation's economy.

The U.S. government will sell $55 billion in bonds next week, to help pay for its massive financial rescue programs. The government plans to borrow a record $550 billion in the last three months of the year to help pay for various financial rescue packages.

Meanwhile, the Federal Reserve, the U.S. central bank, says it will pay a higher interest rate to commercial banks on their reserves. The changes should help banks boost their earnings.

A report by an industry trade group (the Mortgage Bankers Association) shows that the number of Americans who applied for home loans dropped last week to the lowest level in almost eight years. The report says borrowing costs are still too high.

A top official of the company that owns most of the third-largest U.S. automaker, Chrysler, says the government needs an economic stimulus package and must make sure the car industry does not fail. Cerberus Capital Management Chairman John Snow says President-elect Obama and his treasury secretary need a bipartisan plan to fight the worst economic downturn in 50 years.

Europe's largest economy is moving to ease the impact of the financial crisis. Germany has approved almost $30 billion in tax cuts and loans. Top officials are urging banks to pass on interest rate cuts to consumers.

And oil prices are down today, after the U.S. Energy Department said the nation's inventory of crude oil is stable. In New York, the price of crude oil for future delivery was down almost $4.5, to about $66 a barrel, in early trading.