Britain and Europe
Trading was exceptionally volatile in Europe and the United States, especially on Friday when steep drops were followed by rallies followed by more steep drops. The Dow's gyrations set the pattern for European and British indexes. The FTSE 100 index fell to its lowest level since April 1997 on fears of the prospects for military action in Afghanistan and on the outlook for the global economy. The FTSE 100 closed down 6.8 percent on the week and 36 percent below its peak at the end of 1999. Volume was exceptionally heavy all week. With the political and economic outlook remaining so uncertain, few bargain hunters were attracted given the welter of downgrades and portfolio adjustments.

Both the Frankfurt DAX and Paris CAC followed the gyrations in the United States and London as well. The DAX lost 8 percent on the week while the CAC dropped 6.6 percent. Since the beginning of August, the indexes have been down in all weeks save one.

Asia
Asian markets were no different than those in Europe and the United States. Tokyo stocks fell as investors sold exporter shares amid concerns about weak U.S. consumer demand and a strong yen. As the yen rose against the dollar, export heavy stocks such as auto makers were hit hardest as fears grew that their substantial overseas earnings would be dented by the strength of the yen. The Bank of Japan intervened repeatedly to purchase dollars to stave off further increases in the yen's value. Its intervention pushed the yen lower for a short time, but it did little to help the equity market overcome a lack of confidence in the export outlook.

Introduction   •   Global Stock Market Indexes   •   Recap of Global Markets   •   Currencies   •  Indicator Scoreboard

The Bottom Line   •   Looking Ahead