Europe and Britain
The shortened trading week ended on a negative note after the FTSE, DAX and CAC reached three-month highs on Wednesday. The declines on Thursday and Friday could be blamed in part on a healthy consolidation based squarely on profit taking. But investors were not happy with the downward revisions to growth forecasts by the World Bank and the OECD, which had helped to concentrate the markets' minds on the shaky economic environment.

It was the busiest week of the first quarter's corporate reporting season in the United States and it also influenced investors overseas. While many companies' results beat expectations, the figures took second place to concerns about the health of the U.S. economy. This was underlined on Friday by the advance report of U.S. gross domestic product, which grew by only 1.6 percent, significantly under analysts' estimates of 2.5 percent. The slower growth probably could be attributed to the run up and start of the Iraq War along with the unusually severe winter weather that hit the eastern half of the country in February and March. No doubt the late Easter, combined with soaring gasoline and heating oil prices, also contributed to tepid consumer spending. While growth was not stellar, there is still some underlying strength in the U.S. economy, especially compared with the economies of Japan, Germany and Britain. (The British economy expanded at the slowest pace in a year according to their advance estimate of first-quarter GDP.)

Asia
The outbreak of SARS is having a domino affect in other countries besides those infected with the disease. In Australia, for example, the fishing industry is hard hit. Restaurants in Hong Kong, by far the biggest buyers of live Australian reef fish, halted their purchases four weeks ago when SARS prompted diners to stay home in large numbers. The restaurants have barely bought any since, and fish prices have collapsed. The troubles of Great Barrier Reef fishermen, who operate Australia's largest fishing fleet, show how even small, out-of-the-way industries are feeling the effects of SARS. The disease and, more importantly, the fears of the disease are starting to cause measurable economic and commercial harm around the world, particularly in East Asia. With consumers staying away from stores and travelers canceling or postponing trips, service industries, from restaurants and hotels to airlines and cinemas, are being hit particularly hard.

In Singapore, the government announced a $130 million aid package for the tourist industry. The government said visitor arrivals to Singapore had dropped 61 percent in the first 13 days of April, and retail sales had dropped by as much as 50 percent. In places like Paris and London, executives at luxury goods companies are finding that the grounding of many business travelers by companies afraid of SARS, together with a slump in tourism, have meant fewer sales of Burberry raincoats and other costly items frequently sold at airports, hotels and tourist areas.

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