US Federal Reserve chair Janet Yellen said it is appropriate for US central bankers to “proceed cautiously” in raising interest rates because the global economy presents heightened risks.

The Federal Reserve stayed the course on tapering its stimulus for the US economy yesterday, reducing asset purchases by $10bn (€7.32bn) for the second month in a row.

European stock markets reacted badly to the resignation of the Royal Bank of Scotland chief executive, Stephen Hester, and the indication that central banks may end their support of economies.

Asian stock markets were mostly higher in early trading today, with investors betting that the Federal Reserve will likely announce new plans to stimulate the US economy in response to a disappointing jobs report.

Five years after the credit crisis began, Western economies are confronting the prospect of a lost decade of growth, and international diplomats are warning the damage could get even worse if Europe allows its sovereign debt crisis to fester much longer.

BRITISH stocks climbed for the fifth day in six amid speculation the US Federal Reserve may announce more stimulus measures to help drive the world’s largest economy.

Oil posted record prices for the sixth consecutive session in choppy trading conditions.

THE Federal Reserve raised benchmark US interest rates for the 17th time in succession on Thursday, and said inflation risks remain even though slowing economic growth should help ease price pressures.

THERE is increasing confidence that recovery in the US is pushing euro/dollar sentiment in both directions.

THE US economy is poised to accelerate and the Federal Reserve will leave interest rates low for as long as necessary to ensure that happens, Fed Chairman Alan Greenspan said yesterday.

US Federal Reserve chairman Alan Greenspan signalled he is ready to keep US interest rates low for a "considerable" period of time to lift the economy and prevent a dangerous fall in prices.

A recovery in the US economy is a key ingredient in the prevailing view that there will be an upturn in the global economy in the second half of 2003.

INVESTORS taking profits on the €10 billion plus increase in the value of Irish stock over the last four weeks knocked almost €1bn of the value of the ISEQ yesterday.

The likelihood of the US sliding into a 'double-dip' recession in the US is low, according to the president of the St Louis Federal Reserve bank.

Share prices were lower in midday trade, pulled down by yesterday's FOMC comments, dealers said.

Share prices were off their lows at midday, but lower nonetheless as investors took profits on recent sharp gains and behaved cautiously ahead of tomorrow's Federal Reserve meeting on monetary policy and after yesterday's news of the US Airways bankruptcy, dealers said.

Share prices closed the morning lower in listless trade, with investors waiting for the outcome of the US FOMC meeting tomorrow and the interim results announcement from China Mobile on Wednesday, dealers said.

US government bond prices closed sharply higher, sending yields to new lows, after a weaker-than-expected July nonfarm payroll report raised expectations that the Federal Open Market Committee may cut interest rates to ensure economic growth, dealers said.

Leading shares remained firmer but off intraday highs in thin midday trading, tentatively clawing back some of yesterday's massive losses, although investors continued to tread warily in the wake of the apparent $4 bn (€4.06bn) fraud at WorldCom, dealers said.

Technology shares were lower midsession, with the Nasdaq composite hovering near its lows for the day amid worries about the upcoming earnings season, with fears of ongoing tensions in the Middle East continuing to weigh on sentiment, dealers said.

Share prices were lower in early trade, after stronger than-expected inflation and labor data intensified the market's concerns that the Federal Reserve is poised to raise rates soon, dealers said.

Share prices are expected to open flat, as investors digest the latest batch of fourth-quarter corporate earnings and wait for the Federal Open Market Committee decision on interest rates tomorrow, dealers said.

Leading shares remained weak but were off their worst levels in cautious midday trading, aided by a Wall Street opening which, while directionless, was slightly better than had been previously indicated, dealers said.