Wall Street shares staged a spirited rebound on Thursday, sparking turnarounds in London and Paris after Asian markets again suffered big losses on global recession jitters.

In New York the Dow Jones Industrial Average bounced back after an early slide and was up 2.4 percent in midday trade at 8,722.31 while the tech-heavy Nasdaq had gained 1.12 percent to reach 1,633.80.

Analysts said the turnaround was driven by the energy sector, which in turn was reacting to higher oil prices.

In late European trade Brent North Sea oil for December delivery was up $2.55 at $67.07, while in New York light sweet crude for December delivery jumped $2.30 to $69.05 per barrel on prospects for a production cut by the OPEC producers' cartel.

OPEC President Chakib Khelil said the cartel would decide to lower output at an emergency meeting in Vienna on Friday but would take care not to worsen a global financial crisis.

"We are going to reduce (output on Friday). By how much? We don't know. This is something we are going to decide tomorrow," Khelil, who is also the energy minister of OPEC member Algeria, told reporters in Vienna.

"It's a concern that we could make the financial crisis worse by taking too strong a reduction," said Khelil.

On Wall Street oil giant Exxon shot up 6.71 percent while rival Chevron added 7.09 percent.

The oil-driven turnaround in New York had a positive impact in London, where the FTSE 100 closed with a gain of 1.16 percent to finish at 4,087.83 while in Paris the CAC 40 rose 0.38 percent to 3,310.87.

Elsewhere there were gains of 0.74 percent in Brussels and 1.09 percent in Amsterdam. Share prices fell 0.15 percent in Milan, 0.54 percent on the Swiss Market Index and 2.05 percent in Madrid.

Earlier on Thursday prices tumbled in Asia and Europe despite fresh government measures to snuff out a financial crisis threatening the critical flow of credit to businesses.

On Thursday some of the world's biggest companies gave voice to deep pessimism regarding their prospects in the months ahead.

"So long as there's this rather blunt -- and perhaps rather realistic -- fear of a global recession looming, then there's certainly scope that stocks will continue to struggle," said CMC Markets dealer Matt Buckland in London.

Sentiment suffered from disappointing corporate news.

ArcelorMittal, the world's biggest steel producer, said the financial crisis has forced it to review its global growth projects while German automaker Daimler warned of weaker 2008 profits for a second time amid "a high degree of uncertainty" over the outlook.

"The financial crisis is turning into an economic crisis," Daimler chairman Dieter Zetsche said, adding that it had provoked "in recent weeks a dramatic slump on our major markets."

Volvo Group of Sweden announced plans to cut an additional 850 jobs in its machine and construction manufacturing subsidiary owing to a slowdown in demand.

"The weakening of the market which started in North America during last year and was later spread to Europe has now developed into a global slowdown in the construction equipment market," the company said in a statement.

Fiat of Italy said its 2008 financial results would be at the lower end of its projection range and warned that tough market conditions in 2009 could cut into profits.

In Paris shares in Franco-Dutch airline Air France-KLM plunged more than 10 percent after its chairman foresaw three years of zero growth.

All Asian markets suffered dizzying losses on Thursday. Tokyo's Nikkei index fell 2.46 percent, after plunging by more than seven percent at one stage to hit levels last seen in May 2003. Australia closed down 4.4 percent and Hong Kong 3.6 percent.

Worst hit in Asia was Seoul, which ended down 7.4 percent, while Shanghai declined by 1.07 percent and Mumbai dipped 3.92 percent.

On Thursday's stock market falls came despite an announcement of further measures designed to restore confidence in the finance sector and among consumers.

Japan's central bank said it had injected 600 billion yen (6.2 billion dollars) into the short-term money market while the International Monetary Fund moved to bail out Pakistan, which could need as much as 15 billion dollars to help pay mounting foreign debt.

Governments around the world have unveiled packages over the last month totalling more than three trillion dollars, including loan guarantees and cash injections, to restore confidence to the financial system and reverse a sharp slowdown in lending.