Page last updated at 21:06 GMT, Friday, 17 October 2008 22:06 UK

US stocks slide on housing data

London trader 16 October
Economic concerns are still in the front of traders' minds

Leading US shares ended the week lower, after figures showed a sharper-than-expected fall in the construction of new homes for September.

The Dow Jones industrial average closed 127 points or 1.4% down at 8,852,22 after a volatile session. But for the week the index ended 4.8% higher.

European indexes fluctuated wildly all week but closed near highs for the day.

The FTSE 100 closed up 5.2%, while Germany's Dax index was up 3.4% and France's Cac 40 ended up 4.7%.

It comes at the end of a week of rallies and slumps, unseen since the crash of 1987.

The FTSE 100 gained 3.3% in the week, while the Dax rose 5.5% and the Cac 40 gained 4.8%.

Rallies and slumps

Stock markets have been rising and falling all week as investors try to decide how severe the global economic downturn will be.

President George Bush says the US rescue plan needs time to work

"This is the most volatile week we've seen," said Thierry Lacraz, strategist at Swiss bank Pictet in Geneva.

"The sole intelligent thing is to remain on the sidelines and not make any huge bets."

In his latest effort to reassure the markets, US President George W Bush told the US Chamber of Commerce it would take time for his administration's financial rescue plan to work.

"It took a while for the credit system to freeze up, it's going to take a while for the credit system to thaw," he said, adding that the rescue moves were "big enough and bold enough to work".

Among other developments:

  • Credit rating agency Fitch downgraded Hungary's outlook from "stable" to "negative" as it considered that the global financial crisis had increased the country's credit risk
  • The Prague stock exchange fell 10.2% to 842.8 points, its lowest point for four years
  • Oil prices rose above $72 a barrel on expectations that Opec would decide to cut production at its upcoming meeting
  • Share indexes in South Korea and Australia fell back slightly, though markets were relatively stable compared with recent gyrations
  • The Nikkei index climbed 235.37 points or 2.8% to end at 8,693.8, having lost more than 11% on Thursday
  • The Hang Seng in Hong Kong closed barely changed
  • German bank shares were helped by news that the German parliament had passed a 500bn euro ($672bn; 389bn) bank rescue package
  • Bombay's Sensex closed down 5.7% or 606.14 points at 9,975.35

Also on Friday, the investor Warren Buffett said he had been moving all of his own money into US shares.

"If prices keep looking attractive, my non-Berkshire net worth will soon be 100% in United States equities," he wrote in the New York Times.

"Fears regarding the long-term prosperity of the nation's many sound companies make no sense," he said in the article, titled: "Buy American, I am".


FTSE 100
23.70 0.44%
19.54 0.34%
Cac 40
14.48 0.38%
Dow Jones
78.53 0.76%
35.31 1.58%
BBC Global 30
20.65 0.36%
Data delayed by at least 15 minutes

Special report: Financial crisis
16 Oct 08 |  Business

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