Europe and Britain
Equities in Europe staggered under bad earnings reports and unrequited dreams of stronger-than-consensus forecast growth in the United States. Insurance company earnings were particularly dismal. They were hit by a combination of sinking equities and high claims. In Germany and in the rest of the EMU, investors were disappointed with the Ifo west German sentiment index, which once again pointed to economic weakness now and anemic growth ahead. With the approach of the German election on September 22, the data paint a gloomy picture. On the week, all three indexes gave back a good chunk of August's rally. For the first two months of the third quarter, the FTSE, CAC and DAX were down 9.2 percent, 13.6 percent and 15.5 percent respectively.

Asia
Equities investors focused on the spate of U.S. indicators and worried that U.S. growth might slow - this despite preliminary GDP figures and other data that came pretty much on target. Asian countries rely on exports to the United States for their economic growth. Asian indexes followed here closed near their lows for the year with the exception of the South Korean Kospi. All six Asian indexes are down when compared with the end of the second quarter. The losses range from 0.9 percent for the Kospi to 9.4 percent for the Nikkei. The Topix lost 8.1 percent, Singapore is down 4.2 percent, Hong Kong lost 5.2 percent, while the all ordinaries sank 2.8 percent.

The Nikkei is about 200 points above an 18-year low reached on February 6. Since closing above 10,000 on Monday, the Nikkei has fallen on concern about slowing U.S. growth and lower earnings at technology companies. Investors are concerned that it may take longer than expected for earnings to recover. Probably the biggest concern in Japanese markets right now is the possibility that the nation's recovery may falter due to a slowdown in the United States. Continuing hesitation to tackle Japan's structural problems has not helped to reverse the continuing economic malaise of high unemployment and deflation. Domestic demand is virtually non-existent, and what growth there is stems from exports primarily to the United States.

Last Week's Highlights   •   Global Stock Market Indexes   •   Recap of Global Markets   •   Currencies   •  Indicator Scoreboard

The Bottom Line   •   Looking Ahead