LONDON (CNN) - European stocks ended a torrid week with a howl of pain, hurtling to lows not seen in the young century, as economies and company finances worsened.|
Investors on Friday afternoon digested the latest piece of gloomy news, when a report said the U.S. August unemployment rate rose to the highest level in four years, knocking hopes of an early economic recovery.
London's FTSE 100 fell 2.6 percent to 5,070.3, the CAC 40 index in Paris dipped 1.5 percent to 4,413.51 and Frankfurt's Xetra Dax was down 2.6 percent in late trading to stand at 4,749.64.
The Dax has lost 8 percent in the past five trading days, while the French blue-chip index is 6 percent lower and the FTSE dropped 5 percent.
The pan-European FTSE Eurotop 300, a broader index of top stocks, fell 2.5 percent on Friday to its lowest in two and a half years.
Negative sentiment intensified after the U.S. joblessness data – showing a 4.9 percent unemployment rate in August, up from 4.5 percent in July – pointed to continuing weakness in the world's largest economy.
"These are horrendous numbers that put the equation in stark relief for the Fed," David Brown, chief European economist at Bear Stearns, told Reuters. "They have to cut rates by 25 basis points [one-quarter percentage point] in October, and the debate could swing to a 50 basis point cut."
European stocks across a range of sectors went into sharp decline.
Financial-services shares crumpled, as the prospect of a downturn longer and deeper than previously expected threatened to depress demand for loans and investments and cut off profits from securities holdings.
German financial broker MLP (FMLP), the newest addition to the Dax index, tumbled 7.3 percent by late Friday afternoon, the biggest decliner on Frankfurt's blue-chip index, followed by mortgage bank HypoVereinsbank (FHVM) with a drop of 6.6 percent. Deutsche Bank (FDBK) dropped 5 percent.
In London, composite insurer CGNU (CGNU) shed 6.6 percent, and its sector rivals also reeled lower – Royal & Sun Alliance (RSA) dropping 6 percent, and Prudential PLC (PRU) losing 5.3 percent.
Halifax (HFX), Britain's leading home-loan company, was down 4.5 percent, its close rival Abbey National (ANL) was down 5 percent, and asset manager Amvescap (AVZ) dropped 2.5 percent.
In Amsterdam, bank and insurance company ING dropped 5.1 percent, and Banco di Roma gave up 5 percent in Milan.
The FTSE's worst perfoming stock on Friday came from outside the financial sector: Drug developer Celltech (CCH) slumped 7.5 percent amid signs of tougher competition for some its most promising products in development.
Energis (EGS), the British Internet data carrier that has seen its value spiral lower in recent months, tumbled another 7.1 percent.
Anglo American (AAL), the world's biggest gold producer, dropped 6.9 percent after posting a 7 percent fall in first-half profit and warning it did not see a recovery in demand or prices in the near future.
In Paris, TV broadcaster TF-1 (TFI) came in for the worst punishment on the CAC-40 index in Paris, with a 6.4 percent slump.
Aeroplane maker European Aeronautic, Defence and Space Co., or EADS (PEAD), shed 5 percent, and consumer electronics company Thomson Multimedia (PTMM) closed down 4.2 percent.
Credit Lyonnais (PCL), the former state-owned French bank that on Friday posted a better-than-expected second-quarter profit increase, was down 2.2 percent, followed by insurer Assurances Generales de France (PAGF), which fell 2 percent.
Luxury goods company LVMH (PMC) was also on the rack, easing 3.3 percent amid expectations the Japanese economic slowdown will batter its profitability.
Following this week's increasingly pessimistic reports from companies in the telecom hardware industry, Finnish mobile-phone maker Nokia shed 6.2 percent, adding to a similar decline from the previous day.
In Amsterdam the AEX index fell 2.2 percent and the SMI in Zurich was down 1.4 percent, while Milan's MIB30 index dipped 0.9 percent.
U.S stocks opened lower on Friday. By mid-morning, the Dow Jones industrial average was down 180 points at 9,661, while The Nasdaq composite index dropped 0.5 percent, or 8.9 points, to 1,697.