Itsuo Inouye, Associated Press
A man walks in front of the electronic stock board of a securities firm in Tokyo, Japan, Tuesday, Oct. 18, 2011. Asian stock markets tumbled in early trading Tuesday, a day after German leaders warned that a comprehensive solution to Europe's debt crisis may not be near. The benchmark Nikkei 225 stock average lost 137.03 points to end morning session at 8742.57.

LONDON — Renewed doubts over Europe's ability to deliver a comprehensive solution to its debt troubles weighed on markets Tuesday, as did a warning from Moody's that it could soon review France's cherished triple-A credit rating for possible downgrade.

However, a modest rebound on Wall Street after forecast-busting earnings from Bank of America Corp. helped European markets pare some of their losses.

Over the past two weeks, stocks have recovered a chunk of their losses for the year, while the euro and oil prices have surged as investors priced in the likelihood of a big European response to the debt crisis that has seen three countries bailed out and pushed Greece to the bring of default.

The expectation was that the 17 countries that use the euro, led by Germany and France, were preparing a three-pronged solution to the debt crisis. That would include measures to boost the firepower of the bailout fund, a recapitalization of a large part of the banking sector and a plan to get the banks to take a bigger hit on their Greek debt holdings.

However, hopes for such a plan have diminished over the past couple of days. German officials, including the finance minister, cautioned investors against believing that Sunday's summit of eurozone leaders in Brussels would mark a definitive turning point in the crisis. France and Germany, meanwhile, disagree on some key details, particularly on a second bailout for Greece.

Coupled with a warning from Moody's that France may be put on notice for a possible credit rating downgrade after a three-month assessment, sentiment has been flat all day.

"Following last week's bout of optimism, markets have moved into a cautious mode," said Vassili Serebriakov, an analyst at Wells Fargo Bank.

In Europe, France's CAC-40 index closed 0.8 percent lower at 3,141.10, underperforming its main counterparts in the wake of Moody's statement. Britain's FTSE 100 index fell 0.5 percent to 5,410.35 but Germany's DAX ended 0.3 percent higher at 5,877.41.

In the U.S., the Dow Jones industrial average was 0.5 percent higher at 11,455 while the broader Standard & Poor's 500 index rose 0.7 percent to 1,209. U.S. stock markets were led higher by banks — Bank of America was up around 6 percent after it posted a third-quarter profit of $6.2 billion.

As sentiment on Wall Street proved more resilient than expected, the euro recovered some ground, trading only 0.2 percent lower at $1.3707. When investors are willing to take on more risk the euro usually rises, as it has in the previous two weeks.

Likewise oil prices rallied, with the benchmark rate for November delivery up 51 cents at $86.89 a barrel in electronic trading on the New York Mercantile Exchange.

News that China is growing at its slowest rate in two years added to the unease in markets in the run-up to Sunday's meeting.

Though Chinese growth was running at a still strong rate of 9.1 percent in the three months through September, the slowdown comes at a time when other key pillars of the global economy, such as Europe and the U.S. have seen their growth rates slow down sharply as well.

"Given the European Union as a whole is China's largest trading partner, investors are justifiably questioning the ability of Europe to register enough growth to help alleviate its current debt crisis," said Geoffrey Yu, an analyst at UBS. "The soft data added to market woes initiated yesterday."

In mainland China, the Shanghai Composite Index dropped 2.3 percent to 2,383.49 while the smaller Shenzhen Composite Index lost 2.9 percent at 1,010.46.

Elsewhere in Asia, Japan's Nikkei 225 lost 1.6 percent to close at 8,741.91. Hong Kong's Hang Seng plunged 4.2 percent to 18,076.46. South Korea's Kospi fell 1.4 percent to 1,838.90. Benchmarks in Singapore, Taiwan, Australia, Indonesia and the Philippines were also lower.


Pamela Sampson in Bangkok contributed to this report.