According to the latest available figures, the Dow Jones industrial average was down 41.11 points, or 0.42 percent, at 9,707.44. The Standard & Poor’s 500 Index fell 10.09 points, or 0.95 percent, at 1,050.78. The Nasdaq Composite Index shed 23.81 points, or 1.12 percent, at 2,107.61. U.S. stocks fell on Thursday as signs of weakness in housing and investors’ worries that authorities might be curbing stimulus efforts too soon sparked caution. The FTSEurofirst 300 index of top European shares ended 1.9 percent down at 987.37 points. European shares hit a two-week closing yesterday, led by banking and energy stocks on weaker U.S. housing data and as major central banks said they were scaling back some emergency lending facilities. Japan’s Nikkei stock average slid 2.5 percent on Friday.

The European competition commissioner has warned EU states against “bribing” car companies in order to “steal” jobs from other countries. According to various reports over recent days Spain is sliding into a full-blown economic depression with unemployment approaching levels not seen since the Second Republic of the 1930s and little chance of recovery until well into the next decade. President Sarkozy will back down today over his demands that bankers’ bonuses must be capped. Instead, the French President will insist that the issue of restructuring their pay be discussed among fellow world leaders at the G20 meeting starting in Pittsburgh. The US financial sector’s losses on large loans exploded over the past year, exceeding the combined losses since 2001.  Official figures revealed yesterday that hedge funds and other members of the “shadow banking system” were hit the hardest. According to new data, the return of confidence to the markets has failed to boost M&A activity. Yesterday, some of Europe’s central bankers said Banks should be required to hold higher levels of capital to avoid the need for government bailouts and also banks that are seen as too big to fail should be more heavily supervised. Fewer Americans filed new claims for jobless benefits last week compared to the previous week. Sales of previously owned homes in the US unexpectedly fell in August, indicating that the recovery will be slow.

Due for release today there is the CHF KOF Institute Economic Forecast, USD Durable Goods, USD Durable Goods Ex Transportation and USD New Home Sales.

By Greg Secker