Britain and Europe
Equities investors continue to react negatively to earnings information and future earnings prospects especially in the technology, media and telecommunications (TMT) areas. And fresh disappointments only added to investor uncertainty. Investors continue to punish companies even though earnings are as expected. They do not like to hear warnings of lower earnings ahead. German and French markets were disappointed by profits from key companies and warnings that may point to weaker than expected growth for the European economy. Disappointing German unemployment data didn't help relieve the stress.

European stocks fell led by phone related companies amid concern that a slowing U.S. economy will crimp earnings growth, especially for those with a global presence. Most worrisome is that virtually every company reporting numbers has been giving a lower outlook for the next couple of quarters, and it is difficult to say when this is going to turn around.

In Britain, the Bank of England lowered rates for the first time in 20 months. But despite the 25 basis point cut the FTSE 100 finished lower on the week. A rate cut had been widely expected and when the news came at noon on Thursday, the markets took the move calmly. However, investors could not get enthusiastic given worries over the U.S. economic downturn and weaker growth elsewhere. The TMT stocks, which blew red hot and stone cold last year, continued to provide the major drag on the FTSE 100. The speed and scale of the U.S. decline in growth has surprised everybody, and the market is not forgiving.

Asia
The Nikkei continues to slide to new recent lows. At one point on Thursday, the Nikkei slipped below the critical 13,000 mark and approached its lowest level since December 1985. A contributor to the plunge was revised third quarter data, which showed the economy has contracted again. GDP was revised from an increase of 0.2 percent to a decline of 0.6 percent, clearly a big disappointment. However, on Friday, the Nikkei 225 jumped 284.60 points, or 2.2 percent, posting its biggest one day gain this year as investors were buoyed by the interest rate cut and a perception that the stock sell off may have cut too deep. Foreign investors were net buyers of Japanese stocks for the second month in a row on the Tokyo, Osaka and Nagoya exchanges.

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