Stocks fall but hopes high as Obama gets office

Updated : Tuesday January 20 , 2009 7:37:55 PM
WASHINGTON: Barack Obama takes over as U.S. president on Tuesday with hopes riding high he can conjure up a rescue that will jolt the world's biggest economy back to life and contain the financial crisis ravaging global markets.The first African-American to become U.S. president will take his oath against the backdrop of plunging world stock markets, prospects of a drawn-out U.S. and global downturn, a trillion dollar federal deficit and fears of more crippling bank losses.Underscoring the dire state of the world economy, Japan reported consumer confidence plunged to a record low last month in yet another sign of deepening recession.Asian stock markets dropped sharply on Tuesday in the wake of European losses after Britain's multi-billion-pound bank rescue unveiled on Monday failed to assure investors and main markets in Europe were expected to keep falling."For the next two to three months, hopes for economic steps by Barack Obama will surface from time to time," said Yoshinori Nagano, chief strategist at Daiwa Asset Management. "But once equity markets recover some ground on those hopes, they are bound to face grim reality again."Obama's team has vowed to make its bailout funds work harder to get credit flowing again to cash-starved consumers and companies and is expected to announce soon changes to the second half of Washington's $700 billion bank rescue scheme.