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European Stocks Are Set to Open Weaker, U.S. Data Eyed

European shares are seen opening lower on Friday, paring the previous session's gains, on worries over financing for banks, while markets also focus on U.S. retail sales data for signs of a slowdown in the U.S. economy.

Financials are eyed as media reported that British mortgage lender Northern Rock was seeking emergency funding from the Bank of England.

Rumors about this had swirled towards close of markets on Thursday, pushing the UK bank's shares 5% lower in a stronger broader market.

The pound sterling , dropped to its lowest level in a week against the U.S. dollar in the Asian trading session.

The move in the pound came as the BBC and Financial Times reported the Bank of England will provide Northern Rock with emergency funding. The Bank has struggled to raise money to finance its lending ever since money markets seized up over the summer, the BBC reported.

Neither the Bank of England or the U.K. Treasury would comment, but the report suggests a further broadening of the fallout from the U.S. subprime mortgage crisis, which has pushed up the price of funding around the globe.

Bookmakers see Britain's FTSE 100 opening down 39 to 40 points, Germany's DAX falling 40 points and France's CAC 40 31 to 35 points weaker.