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Europe bourses end lower
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September 21, 2001: 11:56 a.m. ET
European shares recover from heavy lows, but still end in the red
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LONDON (CNN) - Europe's major bourses ended the week lower on Friday, as investors stayed unnerved by fears of a global recession and U.S. action after last week's terrorist attacks.
News from Germany's Ifo research institute that top executives in Europe's biggest economy were becoming increasingly pessimistic about the business climate also added to the gloom.
But the markets managed to recover some ground after falling heavily earlier in the day.
London's FTSE 100 closed 2.2 percent lower at 4,457.6, after earlier plunging more than 6 percent at midday. The CAC 40 blue chip index in Paris ended off 2.4 percent at 3,647.05. Frankfurt's Xetra Dax was down 2.7 percent at 3,708.5.
"Fear has been driving the markets," Michael O'Sullivan, strategist at Commerzbank, told CNN. "Equities were very cheap but there was no catalyst to drive the bourses, certainly until they get through the next round of profit warnings."
O'Sullivan also said there was concern as to the "military and geopolitical" fallout from any U.S. response to terrorist attacks on the World Trade Center and the Pentagon.
The Ifo index of executive confidence in western Germany also unexpectedly showed business leaders were more pessimistic in August that in the previous month – the sixth fall in business sentiment in seven months.
Most of the 7,000 companies involved had replied before last week's attacks in the U.S.
Chemicals were the weakest sector in Europe on Friday, falling more than 5 percent, after Dow Chemical warned its third-quarter results would fall short of expectations.
German heavyweight Bayer (FBAY) lost 4.6 percent while rival BASF (FBAS) dropped 4 percent.
Technology stocks had plunged after EMC (EMC: Research, Estimates), the world's biggest data-storage systems maker, said on Thursday it plans to eliminate more than 2,000 jobs and warned that its third-quarter earnings will be lower than anticipated due to a drastic slowdown in technology spending. But many managed to claw their way back from heavy losses.
Telewest Communications (TWT) led losers in London ending at 15.5 percent. Factory controls maker Invensys (ISYS) fell 7.9 percent.
Europe's biggest chip designer ARM Holdings (ARM) turned around to close 2.2 percent higher, while the continent's biggest semiconductor manufacturer STMicroelectronics (PSTM) declined 3.3 percent and Infineon Technologies (FIFX), Europe's No.2 chipmaker, dropped 6.5 percent.
Finland's Nokia, the world's biggest mobile phone maker, fell 4.5 percent.
Allianz (FALZ), Europe's second-largest insurance company, warned its liability to last week's terror attacks could reach  1 billion ($927 million), up from the previous estimate of 700 million. Allianz fell 8.7 percent in Frankfurt.
Munich Re (FMUV3), Europe's biggest reinsurer, lost 1.3 percent. The company has doubled its forecast for claims to 2.1 billion due to damages caused by the attacks that destroyed the World Trade Center.
Swiss Re, the world's No. 2, fell 3.5 percent after it said on Thursday it faced an after-tax burden of about two billion Swiss francs from the attacks. AXA (PCS), the world's biggest insurer, fell 10.3 percent in Paris.
British Airways (BAY), which fell 12.9 percent on Wednesday after announcing 5,200 job losses in the wake of the terror attacks, recovered from double-digit losses to lead gainers on the FTSE 100, rising 7.7 percent.
Its German rival Deutsche Lufthansa (FLHA) was up by 1.1 percent, a U-turn on the previous session's 12.9 percent decline after saying it would take "immense efforts" to avoid an operating loss this year.
Banking stocks came under pressure amid concerns they will have to increase their debt provision as customers may not be able to pay back loans. Barclays (BARC), the UK's fourth-largest bank, fell 3.7 percent, Standard Chartered Bank (STAN) lost nearly 5 percent, Societe Generale (PGLE) dropped 4 percent in Paris and Commerzbank (FCBL) lost 9 percent in Frankfurt.
Oil stocks dipped for the third straight session. An economic slowdown, decline in air travel and fall oil prices could crimp profits. Shell Transport & Trading (SHEL), which owns 40 percent of the world's second-largest oil company Royal Dutch/Shell Group, dropped 4.8 percent. Rival BP (BP-) dropped 4 percent and France's Total Fina Elf (PFP) dipped 5 percent.
Auto stocks were punished, led by exporters to the U.S. German luxury car maker BMW (FBMW) was off 2.3 percent and DaimlerChrysler (FDCX) edged down 0.6 percent.
Shares in luxury goods group Gucci fell 12.5 percent to a low of 66.55 on Euronext Amsterdam, following news a deal over the ownership of the company was in danger of collapsing if the Dutch securities watchdog STE fails to give approval by Monday.
The world's biggest luxury goods group LVMH, owned by Bernard Arnault, and retailer Pinault Printemps Redoute, controlled by France's richest man Francois Pinault, had agreed on a complex three-stage deal on September 10 over Gucci.
But Gucci's stock reversed direction, losing 3.2 percent before being suspended by the exchange pending a statement.
LMVH (PMC) ended 9.5 percent lower in Paris, while Pinault Printemps Redoute (PPP) closed 3.3 percent higher.
In Zurich the SMI dropped 5.4 percent and Milan's MIB30 index fell 4.8 percent. The AEX index in Amsterdam was down 3.4 percent.
The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, lost 2.4 percent, with the chemical sub-index topping the losers, down by more than 5 percent.
In the U.S., stocks failed in an initial attempt to turn positive during morning trading on Friday, as the Dow erased a 313-point loss, only to slide back into the red. The Dow Jones industrial average stood at 8,234.64, down 141.57 points, in late morning trading. It had rebounded dramatically from its heavy loss earlier on to be up by 62 points before retreating again. The failed rally began soon after Dow component General Electric (GE: up $0.82 to $31.19, Research, Estimates) announced that it would meet previously lowered 2001 earnings estimates. The Nasdaq composite index, while still broadly lower, was still off its worst levels of the session. It was at 1,428.44, down 42.49, after being more than 80 points lower in the first minutes of trading. The major U.S. indices have tumbled more than 10 percent so far this week as investors recoiled in the wake of last week's terrorist attack. 
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