European and U.S. stock markets were mixed Monday, despite earlier Asian gains, amid worries about the exposure of financial institutions to an alleged $50 billion fraudulent investment scheme in the U.S.

The FTSE 100 index of leading British shares was up 12.16 points, or 0.3 percent, at 4,292.51, while Germany's DAX was 40.14 points, or 0.9 percent, higher at 4,703.51. The CAC-40 in France rose 14.02 points, or 0.4 percent, to 3,227.62.

On Wall Street, the Dow Jones industrial average was down 44.20 points, or 0.5 percent, at 8,585.48 while the broader Standard & Poor's 500 index rose 0.19 points to 879.92.

Neil Mackinnon, chief economist at ECU Group, said the subdued performance in Europe and the U.S. was related to concerns about the exposure of banks to hedge funds managed by arrested Wall Street investment manager Bernard Madoff. The former head of the Nasdaq stock exchange is accused of running a scheme to defraud investors.

"I think it is weighing on investor sentiment," said Mackinnon.

Some of the world's biggest banking institutions and hedge funds reported huge potential losses on Monday in connection with the alleged fraud. These included Britain's Royal Bank of Scotland Group PLC, Man Group PLC, and HSBC Holdings PLC, Spain's Grupo Santander SA, France's BNP Paribas and Japan's Nomura Holdings.

Trading volumes were modest, however, as investors began squaring up positions ahead of the holiday season in the hope that next year will prove to be better than 2008.

"Equity markets have fallen by the most since the depression era of the 1930s and the outlook is uncertain to say the least," said Jeremy Batstone-Carr, director of private client research at Charles Stanley in London.

There's a raft of economic news due for release this week, though the U.S. Federal Reserve's latest interest rate decision on Tuesday will likely dominate the attention of markets.

Though the markets were undecided about whether the Fed will cut its benchmark interest rate another half percentage point or three quarters of a percent from the current 1.0 percent, there will be more interest in what the Fed says in its statement accompanying the rate decision.

Earlier, Asian stocks rebounded after the Bush administration revived hopes of a bailout for the automakers and China announced a multibillion dollar plan to spur consumer spending.

Tokyo's Nikkei 225 index jumped 428.79 points, or 5.2 percent, to 8,664.66 points, and Hong Kong's benchmark Hang Seng index added 288.56, or 2 percent, to 15,046.95 points.

Japanese shares led Monday's gains even as the country's central bank released figures showing confidence at major manufacturers marked its sharpest drop in 34 years.

China also largely shook off more bad news about waning factory output. Shanghai's key index rose 0.5 percent to 1,964.37 after Saturday's announcement from the central government to increase the amount of money circulating in the economy next year to boost consumer spending.

Beijing's latest effort to keep the world's fourth-largest economy on track seemed to overshadow news that growth in China's factory output fell to its lowest level in nearly seven years. According to the government, industrial output rose 5.4 percent in November from a year earlier, down from October's 8.2 percent growth, as trade plunged.

South Korea's Kospi rose 4.9 percent to 1,158.19 and major stock measures in Taiwan, India, Australia and Singapore were higher by about 2 percent or more.

The dollar weakened 0.7 percent to 90.45 yen, but was still above the 13-year low of 88.16 yen it hit intraday Friday. The euro was 1.6 percent higher at $1.3597.

Light, sweet crude for January delivery was up $2.43 to $48.71 a barrel on expectations of a big production cut from oil cartel OPEC later in the week.

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AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.