LONDON (CNN) - European bourses pulled back from earlier steep lows to end just in the red Monday, enlivened by Nokia and a rallying Wall Street.
Earlier, the FTSE, Xetra Dax and CAC 40 plumbed near three-year lows amid concern the world economy is in big trouble.
Just ahead of midday trade, there was only one gainer in France and none in Frankfurt or Milan. Japanese stocks closed earlier more than 3 percent lower at a 17-year low.
But market conditions improved when Wall Street turned higher after a sluggish start, and the world's biggest mobile phone maker, Finland's Nokia, leapt 7.5 percent in a move attributed to a stronger earnings outlook from U.S. mobile phone components maker RF Micro Devices.
London's FTSE 100 ended 0.72 percent lower at 5,033.7, its lowest level in three years, after pulling back from 4,895.9. More than $50 billion had been wiped off the value of the index earlier.
The CAC 40 blue chip index in Paris lost 0.6 to close at 4,383.74, while Frankfurt's Xetra Dax was little changed at 4,729.17 after being down 2.6 percent, or 121.57 points, at midday.
"Old" and "new economy" stocks had gone into freefall earlier after last week's rout, which dragged the Dax to an 8 percent loss in five trading sessions, while the French blue-chip index fell 6 percent and the FTSE dropped 5 percent.
Scottish Power (SPW), the UK's biggest electricity company, closed 11.2 percent lower in London, the FTSE 100's worst performer. The power utility, which bought U.S. utility PacifiCorp, said its profit will fall because U.S. electricity prices have collapsed.
Fund manager Amvescap (AVZ) ended 8.4 percent lower while Schroders (SDR) dropped 5.6 percent.
Software company Sage (SGE) closed 6.4 percent lower and factory controls maker Invensys (ISYS) lose 7.6 percent.
British Airways (BAY), Europe's biggest airline, fell 2.6 percent. The company denied a weekend report that its was about to axe 8,000 jobs as it battles to remain profitable.
Europe's biggest defence company, EADS (PEAD), topped the losers in Paris, falling 5.4 percent
Alstom (PALS), the trains-to-turbines maker, dropped 5.2 percent while one of the world's largest electrical engineering companies, Schneider Electric (PSU), fell more than 4 percent.
Media and defence conglomerate Lagardere (PMMB) fell 2.7 percent and hotel operator Accor (PAC) lost 3.2 percent.
French luxury retailer Pinault Printemps Redoute (PPR) closed 1 percent lower. The company earlier agreed to buy 8.6 million shares of Italian fashion house Gucci from bitter rival LVMH, the world's biggest owner of luxury brands, ending a two-and-a-half-year feud between the two companies.
LVMH (PMC) ended little changed in Paris, while Gucci jumped 5.5 percent in Amsterdam.
Europe's second-largest electronics components maker, Infineon Technologies (FIFX), headed the Xetra Dax in Frankfurt, rising 6.5 percent, while Deutsche Telekom (FDTE) rose 4.6 percent.
Drugmaker Schering (FSCH) was 4.7 percent lower in Frankfurt and specialty chemical maker Degussa (FDGX) was down 3.9 percent.
Volkswagen (FVOW), Europe's biggest automaker, was nearly 1 percent lower after CEO Ferdinand Piech told Reuters Saturday the company may miss its goal of achieving return on sales of 6.5 percent this year.
Europe's largest business software maker, SAP (FSAP), lost 2.6 percent. CEO Hasso Plattner said the company expects its
position in the U.S. market to improve relative to its main rivals even if sales decline in absolute terms.
In Amsterdam, the AEX index dropped 0.5 percent, and the SMI in Zurich was more than 2 percent lower. Milan's MIB30 index dipped more than 1 percent.
The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, bounced back from earlier lows to remain off 0.7 percent.
U.S. stocks shook off early pressure by midday Monday, breaking through some of the pessimism about corporate profits that had pushed the major indexes near lows for the year.
However, analysts said they were extremely wary as to whether conditions could remain rosy for long.
The Dow Jones industrial average had risen 48.32 to 9,654.17 by noon, after being down by 112 points.
It has been a more volatile session for the Nasdaq composite index. It was up 12.60 to 1,700.30 after being down as much as 18 points. 
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