Reply #7: Markets skeptical over euro debt crisis response

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http://hosted.ap.org/dynamic/stories/W/WORLD_MARKETS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-10-20-06-11-38

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.