Asia stocks fall as oil passes $99 amid fear of U.S. slowdown

FRANKFURT: Global stock markets were pummeled Wednesday as investors pondered whether the U.S. economy would slow more than expected and as oil prices flirted with $100 a barrel.

Asian stocks closed sharply lower, European indexes were stumbling in late trading and Wall Street was in retreat.

The dollar, once a source of strength in uncertain times, set another record low against the euro, with the European currency climbing as high as $1.4856.

The rout reflected a broad reaction to news out of the United States on Tuesday - notably new projections by the U.S. Federal Reserve that predicted an economic slowdown next year. New data on Tuesday also confirmed that the besieged housing market, which once helped U.S. consumers buy the world's products and services, has not hit bottom.

"It's getting worse," said Stephen Jen, global head of currency strategy at Morgan Stanley in London. "In reality we know things are getting worse, and expectations - of the U.S. economy and the credit markets - are getting revised down."

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Expecting $100 per barrel by Christmas wasn't cynical enough.