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Financial anxiety gripped the globe Friday, as stock markets worldwide saw steep declines amid worries of a widening debt crisis in Europe and a stalling economic recovery in the United States.
Stock market values declined in Asia and Europe Friday, a day after Wall Street had its worst day since the 2008 financial crisis.
In a glimpse of good news, however, the U.S. economy added 117,000 jobs in July, the federal government reported Friday. That addition -- more than economists expected -- lowered the unemployment rate slightly to 9.1%, but it was not enough to shake off deep economic anxiety stretching from Asia to Latin America, CNN report said.
"We are going to get through this. Things will get better. And we'regoing to get there together," President Barack Obama said in a speech atthe Washington Navy Yard in which he discussed a plan to provide jobs for military veterans.
Obama noted July marked the 17th consecutive month of private-sector job growth, but said much more work needs to be done.
The stock slide started Friday in Asia, prompting leaders to try to contain the damage. The South Korean Finance Ministry held an emergency meeting. Japanese authorities sought to reassure nervous investors, while China's foreign minister expressed confidence in the ability of other world economies to weather the storm.
In Europe, leaders sought to dampen investors' fears that debt crises hobbling the economies of Greece, Portugal and Ireland could take a toll on larger economies in countries such as Italy and Spain. German Chancellor Angela Merkel and French President Nicolas Sarkozy planned to interrupt their vacations to confer by phone about the growing economic unease, a German government spokesman said. Sarkozy will speak separately to Spanish leader Jose Luis Rodriguez Zapatero, French newspaper Le Monde reported.
In Belgium, EU Economic and Monetary Affairs Commissioner Olli Rehn tried to calm the swirl of rumors surrounding stability in the eurozone, the 17-country region that uses the euro as a common currency. He said he does not believe Spain and Italy will need to be bailed out.
Concern about the debt held by governments of Spain and Italy which has pushed up their cost of borrowing -- was "incomprehensible," he said.
"The market unrest witnessed in the last few days is simply not justified on the grounds of economic fundamentals," he said, having broken off his holidays to return to Brussels."It is not justified for Italy.It is not justified for Spain."
He insisted that needed reforms will be undertaken, following the eurozone nations' agreement of July 21, adding that it would take a matter of weeks, rather than months, for the member states to ratify them.
Seeking to reassure the markets, he said, "The political will to defend the euro should not be underestimated."
He also said measures should be in place next month to improve the new European Financial Stability Facility, a euro rescue fund with 440 billion euros, equivalent to about $625 billion.
Rehn's remarks followed a statement by European Commission President Jose Manuel Barroso on Thursday that was widely seen as fuelling concerns over Europe's ability to limit the debt crisis to smaller members like Greece, Portugal and Ireland.
"We are no longer managing a crisis just in the euro area periphery," Barroso said, as he urged European leaders to act quickly to carry out reforms. "Euro area financial stability must be safeguarded."
Heightening concerns in Europe, a monthly economic bulletin released Friday from Banco de Espana -- the Bank of Spain -- showed that the Spanish economy slowed down through the second quarter on its road to an already "moderate recovery." Gross domestic product grew 0.2 per cent quarter-over-quarter, or 0.7 per cent year-over-year.
In the United States, meanwhile, stocks opened sharply higher on a better-than-expected report showing that 117,000 jobs were added to the U.S. economy in July. But the optimism wore off quickly, erasing the initial 171-point gain. The Dow Jones Industrial Average was down around115 points from its Thursday close shortly before noon.