ZT

The Fed gave no indication of what action it would take at meeting Tuesday, but hopes that it will be forced into more action helped stocks in Europe and Wall Street futures recover. Investors still remained worried, however, about the consequences of the U.S. credit downgrade, Europe's debt crisis and mounting expectations of a global recession.

"Rumors are rife when markets are like this, the latest being that there will be a statement from the Fed ahead of the open," said David Jones, chief market strategist at IG Index. "Traders are shell-shocked by the recent drops and it remains difficult to see what can be done in the short-term to instill any confidence back into the market."