- Stocks in Europe and Asia experience heavy losses in morning trade
- The US adds 117,000 new jobs in July, more than expected
- EU commissioner Olli Rehn tries to reassure markets on Spain and Italy
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Now, the eyes of everyone are on the open of US trading in just over half an hour. A positive open - after the worst fall in three years on Thursday - should lift stocks across Europe.
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Stocks update: Meanwhile across the channel, German shares have also recovered a bit - down 0.9%. Stocks in Paris have turned higher, now up 1.1% and Madrid is up 1.6%.
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Stocks update: Shares across Europe, already coming off lows, were boosted by the US data. The FTSE is down just 1%, compared to its low of 3.5%.
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emails: I am an ordinary person, with few savings but money to get by. Unfortunately, this means little to me, apart from the fact that "markets" are "afraid". It seems - once again - our lives are in the hands of detached traders and bankers.
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Right. So US stock futures have rallied - up 1.4% - after the US jobless figures. This suggests a positive US stocks open in less than an hour.
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The US unemployment rate has also dropped to 9.1%, from 9.2%.
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The US adds 117,000 new jobs in July, compared to 18,000 added in the previous month. Analysts had expected 85,000 new jobs last month.
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It is almost time for non-farm payrolls, which is the formal name of the US monthly jobs data.
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emails: I really do wish that financial journalists would stop talking up yet another financial crisis. The hyping up of the banking crisis by the media did nothing but encourage a sell-off of banking stock making the situation far, far worse.
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And something that will surprise many: S&P 500 futures have now turned positive, indicating that US stocks may open higher.
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With less than half an hour to go before the US payrolls data, a reminder that June's figure - 18,000 jobs created - was the fewest added in nine months.
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emails: For too long the US could not get its act together regarding finance - politics was getting in the way. Whilst in the UK we are taking this debt crisis seriously, elsewhere in the EU governments are pandering to the unions.
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RBS has seen its shares recover quite significantly off its lows this morning. They are now down 2.2%, compared to as much as 12.5% earlier.
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Business editor for
The Sun, Steve Hawkes, blogs: "Fright was written all over the faces of people at a Lloyds Bank press briefing yesterday - displaying the mood of much of the financial world. But markets - and the mood - can turn in an instant and it's easy to overdo the gloom."
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Further to my earlier point on the Smurfs as an economic indicator, I'm reminded by a colleague that EU supremo Herman Van Rompuy was
about the Greek debt crisis.
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Iran's state-owned English-language news channel Press TV reported on the financial crisis this morning, laying the blame at the door of the US. According to BBC Monitoring, the channel said "the terrible behaviour of Barack Obama and the members of Congress over not being able to do anything about the deficit were now obvious to most of the world".
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All those red numbers on stock market boards may appear to be a mysterious mix of data to many. The BBC's personal finance reporter Kevin Peachey
explains how the market turmoil could affect you.
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Stocks update: South Africa's benchmark index is also down 2%. This rout is truly global.
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Stocks update: Stocks in Madrid and Milan are still higher. In Spain, they are now up 1.3% - quite the turnaround.
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Stocks update: The FTSE is down 2.3%, or 123 points, to 5,270.32. German stocks fell 2%, while shares in Paris are down 0.6%.
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Worth reminding everyone that the big economic news of the day comes - at 13:30 BST - from the US, where high joblessness has hampered the recovery. Analysts expect the US to have added 85,000 jobs last month, but the unemployment rate to remain at 9.2%.
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By the way, stocks are down about 6% in the US since the Smurfs movie ("A Magical Smurf Adventure") was released on 29 July. Coincidence?
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emails: This share sell-off will lead to a downtrend in various sectors, like real estate and banks. People will lose jobs. People will choose to sit on their cash.
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Gordon Brown,
writing in the Huffington Post, is hugely pessimistic about the eurozone's ability to sort this crisis. Brown says that the eurozone summit on Greece's latest bailout will be seen as a "huge missed opportunity, the turning point at which history failed to turn".
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Finally turning to Italy and Spain, Mr Rehn says: "The recent market unrest is simply not justified on the grounds of economic fundamentals."
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emails: The situation appears never-ending and one asks what it takes for those responsible to realise and digest what is happening to us all right now.
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The EU's latest rescue package will be ready "in weeks, not months," Mr Rehn says.
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"I'm confident that once investors understand all the work underway, behind the scenes, they will be reassured," Mr Rehn says.
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The EU's Mr Rehn is talking about the latest 109bn-euro rescue package for Greece, which expands the mechanism to help other eurozone members: "We need to adapt our crisis management tools to be effective."
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In a press conference happening right now, the EU's economic affairs commissioner Olli Rehn says: "The political will to defend the euro should not be underestimated."
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A reminder: the gap between Spanish and Italian bonds and German debt - the safest in Europe - hit a record again on Friday. They are the riskiest they have ever been since the euro was created in 1999.
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In what may be a significant move, the EU's economic affairs commissioner Olli Rehn told BBC radio that it will release a report later this year on the possibility of issuing eurobonds - that is, debt backed by all 17 countries rather than individual nations.
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We understand the Chancellor George Osborne, who is on holiday in the US, is planning to speak to the governor of the Bank of England Mervyn King, the EU Economic and Monetary Affairs commissioner Olli Rehn and other European figures by the end of the day.
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With the prime minister and his deputy away on holiday, the most senior government minister in the UK is William Hague. "We're constantly monitoring the situation and we're in close touch with our European and American counterparts. The chancellor and the prime minister are getting constant updates," the foreign secretary said.
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Just like the awakening in 2007 to the idea that many of the housing loans and associated financial products were worthless, so there is a growing fear that a number of financially overstretched governments, especially in the eurozone, will not be able to repay their debts in full.
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emails: For the past few years trillions have been invested in global economies - where did the money go? Sovereign debt is just the tip of the iceberg. We haven't even got around to all the trillions of global credit card debit that exist out there. Economies can't grow if Joe public doesn't have any money to spend. It's not rocket science.
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But stocks in Spain and Italy turned positive in volatile trading. Rumours were swirling that the European Central Bank might buy their bonds - after the Belgian central bank head suggested that it was a possibility.
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emails: I've been investing in stocks and bonds for years now. This panic is, to those who recognise it, a blessing in disguise. Not only are share values at an artificially low price but the exchange rate between the dollar and the pound is very volatile. This is giving me an almost guaranteed return. Others are worried while I'm cashing in.
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Across Europe, stocks were also much lower. German shares dropped 2.6%, down for the eighth day in a row. Stocks in France are lower for the 10th day.
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In the late morning, stocks continue to be in the red. The UK's FTSE 100 index is down 2.8%, or 151 points, to 5,241.67. My colleague Dominic Laurie informs me that the index was higher at the end of January 1998 than it is right now.
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Hello, and welcome to our live coverage of the ongoing sell-off in stock markets across the world.
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