Europe and Britain
European and British stocks extended their declines after a parade of heavyweight technology and telecommunications firms telegraphed earnings warnings for the second quarter and beyond. More depressing corporate earnings news from both sides of the Atlantic on Friday set the seal on what already was a bad week for equity markets. The FTSE 100, London's benchmark index, dropped back below the 5,700 level for the first time since May 14 and sentiment isn't getting any assistance from the United States where equities have also tumbled on earnings fears.

FTSE International Ltd.'s changes to its global stock indexes will trigger about $50 billion in share transactions as investors adjust their stock holdings to match the benchmarks. The index provider will now rank companies based on the percentage of their shares available for trading, known as free float, instead of a company's market value. That means some stocks may decline as FTSE cuts their weightings in its indexes because chunks of their shares are owned by governments, other companies or families. Investors whose funds replicate the indexes, known as passive fund managers, may need to buy and sell shares to match the changes to FTSE's indexes, which are tracked by funds worth about $1 trillion. FTSE started using free float calculations for new companies in March and expanded its use to all companies.

Asia
The Nikkei dropped on economic worries as growth declined in the first quarter and subsequent data showed that the economy will probably drop in the second quarter as well. Global chip sales are expected to decline 14 percent this year on slumping world demand, hitting manufacturers in Japan and other Asian countries. Falling prices are adding to the gloom. Computer memory chip prices are at record lows with no recovery expected soon. The market is dependent on the United States; a recovery in spending by U.S. companies is a prerequisite for a rebound in Japanese technology stocks.

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