Shares in New York fell heavily just before the end of trading on Thursday to close 230 points lower.

Investors on Wall Street are clamouring for good news that just isn't there

Thomas F Lydon Global Trends Investments

Stock markets in the US and Europe had been jittery all day because of bad company news, poor economic figures and the prospect of continuing high oil prices.

In London the FTSE 100 index came to within four points of its lowest level for six years.

It recovered slightly to close down 52 points at 3,814.

But after New York's heavy fall, London and the other European markets are likely to head even further down on Friday.

Gloomy economic figures

The Dow Jones began the day with a 100 point fall after the computer services company Electronic Data Systems warned that its profits would be lower than expected.

Its stock fell by more than half and helped drag down shares in rivals such as IBM.

US economic data added to the gloom.

The number of people claiming unemployment benefit was higher than expected.

And the latest housing figures suggested there was weakness in the housing market.

Accounting irregularities

The sell-off accelerated late in the day and the Dow Jones closed down 230 points, or 2.8%, at 7,942 - it last closed below 8,000 in July.

"Investors on Wall Street are clamouring for good news that just isn't there," said Thomas F Lydon, president of Global Trends Investments.

In Paris, more accounting irregularities, this time at the French services group Sodexho, affected shares.

The Cac 40 index fell 2.5% to end at 2,927 points, its lowest closing level since January 1998.

And in Frankfurt, the Dax index dropped to a new five-year low.

It ended down 3.76%, or 117 points at 3,007.