EUROPEAN share markets will open nervously this morning after a sharp fall on all Street. US shares trimmed their heavy losses in late trading but still closed sharply lower yesterday after another batch of profit warnings heightened anxiety about earnings reports.

The Dow Jones industrial average ended down 83.11 points or 1.48 per cent at 5,520.54, having rebounded from a fall of nearly 135 points. The Nasdaq market, which has a high proportion of high tech stocks, lost 34.90 points or 3.06 per cent to 1,106.29.

While European markets fell late yesterday in response to the decline on Wall Street, the opening of the US market today is likely to be anxiously awaited with forecasts last night warning of further falls.

The catalyst for yesterday's fall was a profit warning from computer company Hewlett Packard. The biggest falls yesterday were recorded by high technology stocks, with Hewlett Packard's (HP) warning yesterday following poor second quarter results from Motorola. HP shares lost around 11 per cent in value.

Overall dealing volumes were heavy and analysts were not expecting much of a rebound in Wall Street today, where close attention will be paid to the latest figures on retail sales and producer prices for pointers to interest rate trends.