Financials under pressure while Yahoo said to reject Microsoft offer (11-02-2008)

Wall Street had a bleak week and ended mixed on Friday as investors dealt with concern regarding bond insurers as well as anxiety about the broader economy. The Dow Jones rose in early trading, but ended down more than 60 points, while the Nasdaq composite index gained.

Asian markets were trading after a break of a few days for Lunar New Year with the exception of Japan, where markets are closed for a national holiday and Vietnam and Taiwan that take an extra day. Declines in the region were led by banks, particularly in Australia, where the Reserve Bank of Australia has signaled it may have to raise interest rates again to deal with uncomfortably high inflation. India’s Sensex also declined as Shares of Reliance Power Ltd., which was oversubscribed more than 70 times, raising $3 billion to mark India's largest initial public offering to date, lost over $10 on their Monday debut.

European stock markets opened with losses and although these have been pared since early morning trading, bourses are still in negative territory, led by the financials sector, which has been hammered since last summer. Around the region UBS was down 1.7 percent and Barclays was losing 1.8 percent, while Societe Gιnιrale pulled back 3.3% after it launched a rights issue at a sharp discount trying to raise cash to offset losses in its balance sheet.

Back over the other side of the Atlantic, futures were pointing at a weak open at 11:40 GMT as the battle for the takeover of Yahoo gathers strength, on the back of a dismal week last week, when investors could not shake off worry about the unfathomable effects of the subprime fallout and the threat of inflation.

Source: ISFM