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EDITIONS
Friday, 19 July, 2002, 22:58 GMT 23:58 UK
Wall Street rout closes grim week
A trader in Germany watching the Dax slide
Hopes the worst is over are fading fast
Share prices worldwide suffered another battering on Friday.

Investors' confidence was shaken by reports of a criminal investigation into giant US drug firm Johnson & Johnson and profits fears at hi-tech and telecoms firms in Europe and the US.

The US blue chip Dow Jones industrial average index lost 390 points, or 4.6%, to close at 8,019.26 points, within a whisker of dropping below 8,000 for the first time since October 1998.

"Part of the fear is that there's no place left to hide. People are selling everything that hasn't gone down yet," said Will Muggia, a New York-based fund manager.

Friday's falls
New York: Dow,
-4.6%
New York: Nasdaq,
-2.7%
Frankfurt: Dax,
-5.0%
Paris: Cac,
-5.4%
London: FTSE,
-4.6%
Tokyo: Nikkei,
-2.8%

Almost two and a half billion shares changed hands on the New York Stock Exchange, its second busiest day ever.

Across the US economy, big name firms saw their stocks hammered: computer maker Sun Microsystems was down 27%; soft-drinks maker PepsiCo down 10%; Johnson & Johnson down 16%.

Sectors as diverse as consumer goods, technology and oil had all lost between 6% to 10% of their value during the week, analysts said.

Also in New York, the tech-heavy Nasdaq index dropped 2.8% on Friday to 1,319, while the broader Standard & Poor's 500 index slid 3.9% to 846.49.

Global contagion

Investors have seen about $1.5 trillion wiped from the value of US stocks in a little over a fortnight since the 4 July national holiday, according to the Wilshire 5000 Total Market Index .

In Europe, London's FTSE index of leading UK shares closed down 199 points, or 4.6%, at 4098.3.

The latest worldwide sell-off began late on Thursday as investors registered disappointment with the picture of the US economy emerging from a slew of profits reports by giant companies.

On Friday, gloom spread first to Asia, as markets round the Pacific were pounded in the wake of Wall Street's woes, then to Europe.

More bad corporate news hit the already fragile confidence of investors.

Swedish mobile phone maker Ericsson announced it had lost more money than expected, and German technology group Epcos warned of losses.

"It is Friday, we had a very poor day yesterday and Europe is taking a battering today - it is again on concerns that companies are not earning as much as they thought," said Tom Hougaard, a trader at City Index.

Dollar woes

Another blow came when the US drug firm Johnson & Johnson said it was under criminal investigation over allegations of record-keeping irregularities.

And the continued uncertainty about US economic prospects was bad for the beleaguered dollar as well, pushing the yen-US dollar rate to less than 115.

The same effect was visible in Europe's currency markets, and the euro further cemented its return with a rise to more than $1.02.

With so much of the world's attention focused on the US economy, the global retreat came as little surprise given the dismal showing of US markets on Thursday night.

The markets' months of misery
New York Dow:
Down 17.5% from 17 May peak
London FTSE:
Down 20.5% from 15 May peak
Frankfurt Dax:
Down 19.3% from 15 May peak
Paris Cac:
Down 23.1% from 15 May peak
Tokyo Nikkei:
Down 13.2% from 20 May peak

Down, up, down

Gains on Wall Street on Wednesday after seven straight falls, together with a modest recovery in share prices in Europe all week, had triggered hopes that markets were taking a breather from their relentless slide.

But after a succession of corporate scare stories and the evaporation yet again of hopes that US company profits would resume their climb, the gains were brittle.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Virginia Eastman
"Nothing seems to be sacred anymore"
Marc Weisbrot, Centre for Economic & Policy Research
"This was a classic bubble bursting"

Analysis

IN DEPTH
The Markets: 9:29 UK
FTSE 100 5760.40 -151.7
Dow Jones 11380.99 -119.7
Nasdaq 2243.78 -28.9
FTSE delayed by 15 mins, Dow and Nasdaq by 20 mins
Launch marketwatch
View market data
See also:

19 Jul 02 | Business
18 Jul 02 | Business
17 Jul 02 | Business
18 Jul 02 | Business
16 Jul 02 | Business
16 Jul 02 | Business
16 Jul 02 | Business
16 Jul 02 | Business
16 Jul 02 | Business
15 Jul 02 | Business
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