European stock markets slide at end of volatile week

European stock markets mostly ended the week lower as investors were disappointed by the failure of US lawmakers to agree a new stimulus deal, and were spooked by surging virus infections.

London ended the day with a small gain, however, and in midday New York trading, the Dow Jones index had also moved back into positive territory after a weak start.

The dollar climbed against its main rivals, while oil prices dropped.

"The same old issues are holding these markets back, considerable economic and political uncertainty - particularly in the US - worrying Covid trends in Europe and a lack of new fiscal and monetary support measures in Washington," said Oanda analyst Craig Erlam.

"Sentiment is fragile, and it's been a turbulent week," said Neil Wilson, chief market analyst at Markets.com.

The need for a new stimulus deal was highlighted by data that showed US jobless claims rising rather than falling last week as a recovery in the world's top economy stumbles ahead of a fraught presidential election.

US durable goods orders posted tepid growth of 0.4 percent in August, meanwhile, well below the revised level in July of 11.7 percent.

Aneta Markowska at Jefferies LLC said it was "a close call" on whether a new stimulus would be agreed, adding: "While still possible, there is a high risk that it does not happen this year.

"Without it, we would expect the economy to hit a major speed bump in the fourth quarter."

A surge in coronavirus infections in Europe has resulted in governments imposing partial lockdowns and social restrictions.

Two British supermarket chains are also now rationing certain products to avoid panic-buying seen earlier this year.

"At this point in the recovery, a return to the Covid-19 abyss due to stricter lockdown measures is quite frankly something the global economy cannot afford," said Stephen Innes at AxiCorp.