Friday January 23, 05:46 PM
World stocks close bad week on poor footing
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LONDON (AFP) - An unending torrent of bad economic and corporate news pushed global stock markets lower again Friday, with every attempted advance undercut before investors could gain any momentum.
Most European markets ended lower, with the exception of London, which eeked out a gain of 0.01 percent at the end of very bad week to finish on 4,052.47 points.
In Paris the CAC 40 (Paris: news) fell 0.71 percent to finish at 2,849.14 points, while in Frankfurt the Dax (Xetra: news) lost 0.96 percent to 4,178.94 points. There were modest gains in Spain and Belgium, but all other major markets were lower.
In the US, stocks came under fresh pressure as investors worried about corporate earnings, the faltering financial sector and the government's ability to combat the recession.
The Dow Jones Industrial Average slid 1.43 percent to 8,006.28 at 1603 GMT.
The tech-heavy Nasdaq (NASDAQ: news) dropped 0.23 percent to 1,462.17 and the broad-market Standard & Poor's 500 index retreated 0.78 percent to 821.01.
Briefing.com's Patrick O'Hare said the market's inability to stretch the positive bias beyond a single session reflected the "understandably sceptical manner in which equity markets participants are operating."
"The scepticism toward the financial sector and the government's ability to manage the situation is on display again," he said.
As companies begin to report their earnings for the last quarter, General Electric (NYSE: GE - news) said net profit fell 44 percent in the fourth quarter and 22 percent for 2008 amid "a very tough environment."
Its shares plunged 7.94 percent to 12.41.
"The 2008 reporting season that is about to start and promises to be terrible. We estimate that markets will get worse before they get better. We advise to stay rather defensive," said strategists at French bank Societe Generale (Paris: FR0000130809 - news) .
In Europe, sentiment was hit by news that Britain had officially joined a growing list of rich nations in recession.
Britain is in recession for the first time since 1991 after its economy shrank during the final two quarters of last year as a global financial crisis raged, official data showed on Friday.
The generally-used technical definition of a recession is two quarters running of negative economic growth.
The financial sector was sharply lower again amid fears of further writedowns and the need for public cash to help the struggling financials survive.
Barclays (LSE: BARC.L - news) shares fell for the ninth consecutive day despite assurances from chief executive John Varley that the bank is doing what it can to "create the conditions" that will allow its stock to rise over time.
Its shares closed down 13.51 percent at 51.20 pence.
"I am acutely conscious that shareholders had a hard time ... What we can't do is control the share price. What we can do is control the conditions which support the share price, by our performance," Varley said in an interview with Cantos Communications Ltd.
The British insurance sector was also badly hit, with Old Mutual (LSE: OML.L - news) down 13.61 percent at 49.50 pence, Aviva (LSE: AV.L - news) off 6.71 percent at 264 pence and Prudential 5.87 percent lower at 288.50 pence.
In Asian trade on Friday, Japanese share prices tumbled 3.81 percent, hit by overnight losses on Wall Street and Sony (Munich: SON1.MU - news) 's forecast of a record loss, dealers said.
Sydney meanwhile shed 4.1 percent following weak US leads and news the nation's three main export economies were softening. Hong Kong closed down 0.6 percent, Seoul gave up 2.1 percent and Shanghai slid 0.71 percent.
Also in the US Friday, President Barack Obama warned in a meeting with Congressional leaders that the economic crisis may be unprecedented, and needed to be dealt with "rapidly."
"We are experiencing an unprecedented, perhaps, economic crisis that has to be dealt with, and dealt with rapidly," Obama said flanked by Republican and Democratic leaders in the Roosevelt Room of the White House.
The president also said that he had been receiving grave news about the state of the economy on his new in-depth daily economic briefing, which he instituted after taking office on Tuesday.
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