Following Thursday’s dramatic 500-point fall in the Dowand losses overnight across Asia, Europe’s stock markets opened sharply lower Friday but recovered some of their losses mid-morning.
The FTSE, the DAX and the CAC 40 were all more than 2 percent lower at the open but reversed some of those losses in mid-morning trade.
By 10:45 CET, Spain's IBEX index and Italy's FTSE MIB were flat to slightly higher.
Thursday’s losses on the Dow where the biggest in a single session since late 2008 as investors took fright at the debt crisis in the euro zone, signs of growth slowing sharply and attempts by Japan and Switzerland to drive their currencies lower.
Later Friday, Angela Merkel, Nicolas Sarkozy and Spanish Prime Minister Jose Luis Rodriguez Zapatero are expected to hold a conference call later today to discuss the crisis in the euro zone following a warning from European Commission President Jose-Manuel Barroso for a bigger rescue fund, a call which was immediately rebuffed by Germany.
On Thursday Jean-Claude Trichet told CNBC that "Governments have enormous responsibilities. We have been constant ourselves in our calls to governments...to be up to their responsibilities. At certain moments we had benign neglect of governments, benign neglect of the markets, and benign neglect of mainstream economists.”
The assertion in that interview that the euro was in a stronger position that the US or Japan doing little to calm investor fears.
Ahead of Friday’s US jobs data there will be a number of things for investors to focus on.
Royal Bank of Scotland shares plunged more than 20 percent lower after a disappointing earnings report.
Barclays stumbled 7 percent, while Lloyd's TSB lost 6 percent.
Shares in Italy's top two banks, Intesa Sanpaolo and UniCreditwere suspended from trading shortly after opening sharply lower on Friday. They were higher after trade resumed.
Italian GDP data came in in line with forecasts. The country's economy grew 0.3 percent in the second quarter, figures released Friday morning showed. Meanwhile Spain's economic growth slowed in the second quarter, the Bank of Spain said on Friday. GDP grew 0.2 percent quarter on quarter and 0.7 percent year on year in the second quarter of 2011, according to the central bank, Reuters reported.
Tune in for live programming on CNBC. We have reporters on the ground in Rome, Milan and Madrid.