World markets calm amid Dubai crisis

European markets rebounded slightly, following reports this week that Dubai World, needed more time to pay back its substantial debt. Even Wall Street didn't fall as much as first feared.

US stocks rebounded from their earlier lows as investors grew confident that the damage could be contained.

In Europe, the FTSE 100 index was up about 41 points, at over five thousand. Germany's DAX rose 50 points to reach nearly 56 hundred.

In France, the CAC-40 climbed 37 point, hitting three thousand seven hundred.

When asked about Dubai's financial situation, British Prime Minister Gordon Brown said he believed the problem can be dealt with. He noted that many banks were not exposed to Dubai, in terms of their assets or investments.

British Prime MInister Gordon Brown said, "I believe that we are satisfied that arrangements in place, the mechanisms that we've got in place, can monitor what's happening, can be sure that this is something that is both containable and is localized."

However, one analyst in Germany said the impact of Dubai's financial problems would be felt most by Greece and Ireland.

Oliver Roth, director of Equities Trading, Closer Brothers Setdler AG, said, "That could lead to an economic depreciation which would reflect on the currency and that explains why the euro's value has in the last 24 hours fallen compared to the dollar."

Dubai's debt crisis rattled world financial markets, raising concerns that some banks could further tighten lending and hamper the global economic recovery.

The possible spillover effects from Dubai fed fears that international banks could suffer big losses if the debt-laden emirate is forced to default.