European Stocks End Lower, Financials Sink
European stocks ended sharply lower Friday, despite a slight rebound after the Federal Reserve announced plans to pour money into credit markets, as fears over the U.S. economy continued to dominate.
The Fed announced a boost in funding for its term auctions to $100 billion and said it would start a series of term repurchase transactions.
Major indexes hit session lows earlier in the day after a weaker-than-expected U.S. jobs report, as the data was regarded by many as evidence that the world's biggest economy was heading into recession.
U.S. employers cut payrolls for a second straight month during February, slashing 63,000 jobs for the biggest monthly job decline in nearly five years, the data showed. Unemployment was 4.8 percent.
A survey by Reuters showed nonfarm payrolls were expected to show a rise of 25,000.
European markets spent the day in the red, with financials leading the main indexes lower on concerns about more fallout from the credit crunch.
Asia's markets were dragged lower by financial stocks after U.S. mortgage lender Thornburg Mortgage said it failed to meet a $28 million margin call from JPMorgan Chase, sparking fears the company might go bankrupt.
Shares in the Amsterdam-listed affiliate of private equity firm Carlyle Group were suspended after the company said further securities may have to be liquidated following substantial additional margin calls and default notices from lenders.
Dutch financial group Fortis posted a full-year group profit in line with forecasts but banking earnings came in well under market expectations as subprime writedowns hit $2.28 billion. Fortis shares gained 3.3 percent.
In other earnings news, Veolia Environment predicted another year of double-digit sales and earnings growth after it reported an 11 percent rise in operating profit for 2007. Shares were down nearly 10 percent as earnings failed to meet analysts' expectations.
And Telecom Italia reported a 19 percent fall in 2007 net profit and said it plans to halve its dividend to divert cash to pay off debt. Shares sank 9 percent.
The euro hit a new record-high above $1.54 against the dollar in Asia on U.S. recession concerns.