BANGKOK - World stock markets stabilized Tuesday after a day of dramatic plunges as futures pointed to a measure of calm returning to Wall Street following the Dow's sixth-worst decline in the last 112 years.

To be sure, investors remained on edge amid fears of a possible global recession. But by late afternoon, major Asian indexes had pulled back from a dizzying tailspin earlier in the day. Key European bourses opened higher.

Futures suggested US stocks would recuperate Tuesday. Dow futures were up 307 points, or 2.9 percent, at 11,032 and broader S&P 500 futures added 33.70 points, or 3 percent, to 1,145.50.

In Europe, Britain's FTSE 100 was up 0.7 percent at 5,103. Germany's DAX rose 1.5 percent at 6,009 and the CAC-40 in Paris jumped 2.1 percent at 3,191.

Some analysts said short covering - when traders are forced to buy stock after having earlier sold borrowed shares in a bet that the market would fall - may have stanched the flow of money out of equities earlier in the day. Short covering generally causes stocks to go up.

"Fear and anxiety ruled the morning session with broad based capitulation giving way to some mild buying and serious short covering this afternoon," Ben Potter, market strategist at IG Markets in Melbourne, said in a research note.

South Korea's Kospi lost 3.6 percent to 1,801.35 after plummeting nearly 10 percent in the morning. Hang Seng of Hong Kong, China, which fell as much as 7 percent, was down 2.3 percent at 20,024.93.

Japan's Nikkei 225 stock average pulled back from a fall of more than 4 percent to close 1.7 percent lower at 8,944.48 - its lowest closing since March 15 - just days after the earthquake and tsunami disasters.

Australia's S&P/ASX 200 index moved into positive territory - closing up 1.2 percent at 4,034.80 - while Chinese mainland's key indexes fell modestly.

The big moves, which added to sharp losses in the past few days, came after the Dow Jones industrials fell 634.76 points on Monday. It was Wall Street's first day of trading after Standard & Poor's downgrade of the US credit rating - which jolted the global financial system and reinforced anxiety that the US economic recovery is stalling.

"It's still very hard to predict how the US market will do," said Jackson Wong, vice president of Tanrich Securities in Hong Kong. "When the dust settles, if the situation doesn't get worse in the US or Europe, the situation will rebound. But the US has to stabilize."

Worries about the US economic recovery have been building since the government said that economic growth was far weaker in the first half of 2011 than economists expected. Intensifying concerns were reports showing that the manufacturing and services industries barely grew in July, although job growth was better than economists expected last month.

Investors are also worried that Italy and Spain could become the next European countries to have trouble repaying their debts. Greece, Ireland and Portugal have already received bailout loans because of Europe's 21-month-old debt crisis.

The fears have pushed investors to shun Spanish and Italian bonds, which have led to higher yields and in even higher borrowing costs for the two countries.

The European Central Bank stepped in Monday and bought billions of euros worth of their bonds. The move helped to lower yields on Spanish and Italian bonds, at least temporarily.

Benchmark oil for September delivery traded at $79.47 on the New York Mercantile Exchange after falling to $75.71, its lowest since September 2010. The contract settled at $81.31 per barrel on the Nymex on Monday.

In currencies, the dollar weakened to 77.41 yen from 77.70 yen late Monday in New York. The euro rose to $1.4262 from $1.4196.