European markets fall in early trading

UNDATED - Global markets are mixed after the U.S. Federal Reserve slashed its key interest rate to historic lows.

Asian stocks climbed modestly but European shares fell in early trading.

Investor enthusiasm was tempered by a mix of lingering worries about the U.S. economy and a weakening dollar that threatens to add to the woes of Asia's exporters.

Also weighing on markets was a steep drop in U.S. stock futures, suggesting Tuesday's rally on Wall Street would quickly fizzle.

Overnight, the Dow Jones industrials surged more than 4 percent after the Fed cut its target rate for overnight loans between banks to a range of zero to 0.25 percent. The Fed also pledged to use ``all available tools'' to heal the U.S. economy.

OIL PRICES-OPEC

Oil prices rose above $44 a barrel Wednesday in Asia as investors waited to see how big a production cut OPEC will announce at a meeting later today in Algeria.

The contract fell 91 cents yesterday to settle at $43.60 despite signs the Organization of Petroleum Exporting Countries planned to announce a significant reduction.

OPEC estimates daily demand for its crude oil has fallen by 700,000 barrels this year. The cartel also predicts demand will drop by at least twice that amount in 2009, with the worsening global economy ``expected to have a strong impact on oil demand.''

OPEC has been hinting it may have to ``shock'' markets to stabilize prices. Saudi Arabia says oil production will be cut by 2 million barrels per day to stem declining crude prices.

MELTDOWN-AUTOS

President George W. Bush tells CNN his administration is ``considering all options'' for helping the domestic auto industry.

Bush says without prompt action, the already distressed economy could slide further into recession.

One option would use part of the $700 billion financial rescue fund to provide loans to the carmakers or using money from the fund as collateral for emergency loans.

But GOP conservatives are opposed to using that money to save any of the Big Three.

A senior GOP congressional aide says the White House and Treasury Department are in talks with Republican Sen. Bob Corker, who's been seeking big union concessions in exchange for rescue money.

Democratic Cong. Barney Frank, meanwhile, says the government should secure veto power over the companies' business decisions as part of any aid.