Hopes for market rebound

Nasdaq and Tokyo bounce back after a week of gloom

The US tech index Nasdaq staged a surprise rebound on Friday as most of the world's other stockmarkets suffered another case of the jitters.

Markets in Europe and the blue-chip Dow seemed stuck in a downwards rut on the last day of the trading week.

Only Tokyo's stock exchange joined Nasdaq, home to many of America's tech companies, in exuding a burst of optimism.

Nasdaq bounced back after falling more than 88 points earlier in the day - the lowest level since December 1998.

It closed up 17.53 points at 2262.49.

The recovery was attributed to hopes of another interest-rate cut by the Federal Reserve next week.

Analysts were speculating that the market may have finally found its bottom.

Gloom elsewhere

Elsewhere concerns over a US slowdown and poor earnings results from tech and telecom companies did little to dispel the week-long gloom.

In London, the FTSE 100 index fell well below the 6,000 points mark again, closing down 59.4 points at 5,943.7.

The Dow shed over 200 points, before attempting a late-afternoon rally. It managed to more than halve its losses, but still closed 86.94 points down at 10439.87.

The downward motion is not just bad news for traders and professional investors. It will also be taking a toll on pension schemes and savings invested in stock.

Profit warnings

The drop comes after many stock market indexes hit two-year lows during the past week.

The falls follow yet more bad news from the wireless communications company Motorola, and computer and software firm Sun Microsystems.

Motorola warned that it could make a loss in the first quarter, rather than the profit forecast in January, while Sun said on Thursday evening that its third-quarter earnings would be well below previous estimates.

The Nasdaq regained some of its composure after Bear Stearns chief economist and former Fed governor Wayne Angell forecast a 60% chance that the Fed would cut interest rates by a half a percentage point.

Tokyo shines

Japan managed to buck the trend on Friday as traders were cheered by the prospect of an economic rescue plan.

The US ratings agency Standard & Poor's had downgraded Japan's credit worthiness, spurring hopes that the government will now be forced to take drastic action to get the economy back on track.

The benchmark 225-issue Nikkei Stock Average rose 172.64 points, or 1.32%, ending the week at 13,246.

On Thursday, the index had lost 26.72 points, or 0.20%, to close at 13,073.36 - its lowest close since 15 October 1998.

Europe's... down

The European markets, however, remained in the doldrums.

In Frankfurt, Motorola's news hit a local competitor to the mobile phone company - Siemens.

The blue-chip Dax index fell 202.65 or 3.23% to close at 6,075.34 points.

The tech-rich Nemax 50 index dropped 4.81% to a low of 1,975.82.

Not to be outdone, the Cac-40 index in Paris was also down 129 points at 5,322 at the close of trading.

The bellwether French market index is trading at levels that were last seen in late 1999.

As was the trend everywhere, French high-tech stocks were bearing the brunt of the selling.

"We're in a bear market and we'll just continue to go down until who knows when," one local trader said.