US energy shares posted their steepest weekly rally since last September. Nasdaq was boosted by cable group Comcast Corp's best weekly advance since 2002 after the America's largest cable TV operator said it will buy back $US6.9 billion in shares and pay its first dividend in almost a decade.
Europe's Dow Jones Stoxx 600 Index fell 2% Friday as banks and other financial stocks had a miserable day amid more losses and reports of problems at some major players. The day's fall cut the Index's gain to just 0.6%.
The index has tumbled 13% so far this year, driven mainly by worries about the rising impact of the US subprime mortgage collapse and associated credit crunch. At least three German banks have been bailed out, banks in the UK are crippled and one, Northern Rock, was nationalised by the Government yesterday. Another in France, Societe Generale has been brought to its knees by unauthorised trading and poor management from the board down.
National markets fell Friday in all 18 western European markets except Iceland. France's CAC 40 slipped 1.8%, while the UK's FTSE 100 lost 1.6%; Germany's DAX slid 1.9%. The Stoxx 50 dropped 2.2%, while the Euro Stoxx 50, a measure for the euro region, lost 2.1%.
British shares fell sharply, especially financials, as brokers criticised the quality of the latest result from buy to let specialist financier, Bradford & Bingley as "unnerving''.
Analysts in the UK at Bear Stearns (which itself was the source of takeover speculation in the US late last week)said they expect further write-downs from lenders like B&B and Alliance and Bingley. There's a feeling UK and European financial groups have been slow in recognising losses and making write-downs on problems loans and deals in the subprime mortgage market and associated credit derivatives.
The FTSE 100's 1.6% loss clipped the week's gain just 0.1%.
Asian stocks rose for the first time in seven weeks, led by shipping and commodities companies like BHP and Rio Tinto.
Brokers said China Shipping Development and BHP Billiton both had their steepest one-week advance since last August.
But financial shares in Australia were especially week: the Commonwealth bank fell 7.5% over the week and investment bank, Macquarie Group shed 5.6% of its value on Friday alone after it was rumoured to be sniffing around the troubled leveraged investor, Allco Finance Group.
The MSCI Asia Pacific Index rose 2.8% last week, trimming this year's loss to 8.3% and ending a six-week retreat. Japan's Nikkei 225 Index rose 4.7% on news the country's economy grew strongly in the December quarter. Singapore's stock benchmark jumped 5.3% despite a small trim in 2008 growth forecasts.
Hong Kong's Hang Seng Index added 2.9% over the week, first weekly advance in six weeks. It has lost 13% this year.
Confidence among American consumers dropped more than expected in February with the Reuters/University of Michigan preliminary index of consumer sentiment falling to 69.6, the lowest since February 1992, from 78.4 in January.
Fourth quarter corporate earnings for the S&P 500 stocks have fallen 15% on average for the members of the Index so far.
That's been skewed by the massive losses for the likes of Citigroup Inc., Merrill Lynch & Co. and other financial companies dragged down profits.
Bloomberg reckons US analysts expect earnings to slide another 1.4% and 0.7% in the first two quarters of 2008 before increasing 16% in the third quarter.
Kraft Foods jumped $US2.02 to $31.33 after Warren Buffett's Berkshire Hathaway said in a filing with the US Securities and Exchange Commission that it held 132.4 million Kraft shares. The 8.6% stake makes Berkshire the largest investor in the company. The move boosted other food groups, like Campbell Soup and Heinz.
