LONDON (AP) — Wall Street braced for losses on Tuesday after world stock markets took a beating over fears that the U.S. economy was heading back into recession.

More drops were expected today, but across the globe there were varied results.  European exchanges opened mixed Tuesday, with neither large gains or losses and Asian exchanges fell,  some by more than two percent.

Japan’s Nikkei closed at its lowest point since April 2009 — falling 2.2 percent, to a level unseen since the previous global economic downturn. Other major Asian markets also sustained losses, with South Korea’s KOSPI dropping 1.1 percent and Australia’s S&P/ASX 200 losing 1.5 percent.

The most dramatic market movements centered on Switzerland after the central bank announced it was pegging the national currency at 1.20 francs per euro in an attempt to rein in the export-sapping appreciation of the currency.

The Swiss National Bank said it was ready to buy foreign currency in unlimited quantities to keep the franc weak.

The surprise announcement had immediate ramifications, particularly in the currency markets -- by late morning London time, the euro was 8.9 percent higher at 1.2036 francs.

But in the United States, markets were expected to go lower today after markets were closed for Labor Day.

Any troubles in the world's largest economy cast a long shadow over the markets, and a report Friday that the U.S. economy failed to add any new jobs in August caused European and Asian stock markets to sink sharply Monday.

That jobs figure was far below economists' already tepid expectations for 93,000 new U.S. jobs and renewed concerns that the U.S. recovery is not only slowing but actually unwinding. U.S. hiring figures for June and July were also revised lower, only adding to the gloom.

The full impact of the jobs report will hit U.S. markets today, since trading  was closed Monday for the U.S. Labor Day holiday.

The jobs crisis has prompted President Barack Obama to schedule a major speech Thursday night to propose steps to stimulate hiring.

Until then, however, traders coming back from the U.S. holiday weekend will have little to hold onto. The uncertainty has already pushed many to pull out of any risky investments — such as stocks, particularly financial ones, the euro and emerging market currencies — and pile into safe havens: U.S. Treasuries, the dollar, the Japanese yen and gold.

With Wall Street closed, investors focused their selling drive in Asia and Europe, where the equity losses Monday were some of the heaviest this year.

"We've got some rough riding ahead," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago, adding he was "concerned that we could see a second wave of selling when most traders are back at their desks."

Dow futures were down 1.8 percent at 11,010 points while the broader S&P 500 futures were 2.0 lower at 1,145.70 on Monday.

The health of the U.S. economy is crucial for the wider world because consumer spending there accounts for a fifth of global economic activity. The U.S. imports huge amounts from Japan and China and is closely linked at all levels with the European market. Beyond its lack of jobs growth, the U.S. has seen a slump in consumer and business sentiments.

Traders were hoping for signs that the Federal Reserve might take action at its September meeting to support the economy — perhaps a third round of bond purchases, dubbed quantitative easing III or QE3, analysts said.

"Right now the possibility has increased," said Linus Yip, a strategist at First Shanghai Securities in Hong Kong. "I think they have to do something. The markets are expecting QE3."

After Asian indexes closed lower, with the Japan's Nikkei 225 shedding 1.9 percent, European shares booked sharp losses Monday.

Banking stocks were among the hardest hit, partly because the U.S. government on Friday sued 17 financial firms for selling Fannie Mae and Freddie Mac billions of dollars worth of mortgage-backed securities that turned toxic when the housing market collapsed.

Among those targeted by the lawsuits were Bank of America Corp., Citigroup Inc., JP Morgan Chase & Co., and Goldman Sachs Group Inc. Large European banks including The Royal Bank of Scotland, Barclays Bank and Credit Suisse were also sued.

Renewed jitters over the eurozone debt crisis also contributed to the slump in financial stocks amid concerns the banks would need to raise new capital. Deutsche bank closed down 8.9 percent in Frankfurt, while Societe Generale in Paris shed 8.6 percent.

And the European debt crisis was never far away. An international debt inspectors' review of Greece's finances was interrupted Friday amid disagreements over the country's deficit figures. The review will resume in 10 days and must be completed in order for Greece to receive bailout loans at the end of the month.

Attention Tuesday was focused on Rome and Berlin. In Italy the Italian parliament was expected to begin debating a new austerity program of tax hikes and budget cuts, and unions planned to strike in opposition.

In Berlin, the German, Finnish and Dutch finance ministers were slated to meet in an effort to resolve a disagreement that threatens to undermine an expanded bail-out for Greece.

Finland wants collateral for its portion of any new emergency loan to Greece. Now other countries are calling for similar treatment. Germany opposes the idea and is trying to broker an alternative.

Investors were also shaken by signs that the Italian government's commitment to its austerity program is wavering. Prime Minister Silvio Berlusconi's government has backtracked on some deficit-cutting measures, prompting EU economic officials to urge Italy to stick to its promised plan.

By late morning Tuesday in Europe, the euro was up 0.9 percent at $1.4188 and 1.3 percent firmer against the Japanese yen, at 109.58 yen. The dollar was up 8 percent at 0.8485 francs.

Meanwhile, European stocks pushed higher after big losses on Monday. Britain's FTSE 100 rose 1.4 percent to 5,174 while Germany's DAX rallied 0.8 percent to 5,289. The CAC-40 in France was 0.9 percent higher at 3,026.

"European indices bounced from their lows as bargain hunters made their moves to pick up stocks at what they perceive to be cheap valuations after yesterday's sharp bearish move," said Giles Watts, head of equities at City Index in London.

On Monday, investors in Europe were spooked by a combination of fears over the state of the global economy and Europe's debt crisis.

Wall Street will also feel the pinch today. Dow futures were down 1.2 percent at 11,070 while the broader Standard & Poor's 500 futures fell 1.4 percent at 1,153.

Analysts said stocks are likely to face a choppy few days as investors fret over the debts of Greece and Italy amid growing signs of political discord within the eurozone. Thursday's monthly interest rate decision from the European Central Bank and the subsequent press conference from its president Jean-Claude Trichet will also be closely monitored in relation to Europe's debt crisis.

Earlier in Asia, shares were under pressure following Monday's big falls in Europe.

Japan's Nikkei 225 index dropped 2.2 percent to close at 8,590.57 with shares of the country's powerhouse export sector skidding amid fears of another U.S. recession. Toshiba Corp. plunged 5.1 percent and Panasonic Corp. lost 3.4 percent.

Australia's S&P/ASX 200 shed 1.6 percent to 4,075.50 and South Korea's Kospi fell 1.1 percent at 1,766.71.

Mainland Chinese shares lost further ground with the Shanghai's benchmark Composite Index slipping to nearly a 14-month low, down 0.3 percent at 2,470.52. The Shenzhen Composite Index lost 1.1 percent to 1,085.35.

Bucking the trend, Hong Kong's Hang Seng registered a modest gain of 0.5 percent to 19,710.50.

In the oil markets, prices remained under pressure by concerns over global demand.

Benchmark oil for October delivery was down $1.71 to $84.74 in electronic trading on the New York Mercantile Exchange. Crude last settled at $86.45 on Friday because U.S. markets were closed Monday for the holiday.

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