World stocks hit five-week highs on Tuesday on optimism a U.S. plan to purge toxic assets from banks’ balance sheets could ease the misery of the sector, but the rally also provided investors a chance to take profits.

Fear of a global recession is quickly becoming reality as world markets have lost $10 trillion in value in the month of October and the U.S. economy almost certainly contracted in the third quarter.

“Investors are taking losses of up to 90% in the $1.2 trillion market for collateralized debt obligations (CDOs) tied to corporate credit,” reports Bloomberg. Much of the losses have been triggered by the failure of Lehman Brothers and Icelandic bank.

The Dow and most foreign stock-markets enjoyed a blistering rally on Wednesday but heading into yesterday morning’s trade the futures look pretty ugly.