Japan stocks fell, capping the Topix index's longest weekly losing streak in seven years, as tumbling crude prices sent oil explorers lower. Shares extended declines after a newspaper report U.S. mortgage lender Freddie Mac will raise $10 billion in new equity.
Inpex Holdings Inc., Japan's biggest oil explorer, sank to the lowest in more than two months after crude declined 11 percent in three days. Sony Corp. led a drop by electronics producers on concern the global economy is weakening.
Sony, the maker of the PlayStation 3 game console, lost 1.8 percent to 4,310 yen. Matsushita Electric Industrial Co., the world's largest maker of consumer electronics, declined 2.1 percent to 2,130 yen.
Manufacturing in the Philadelphia region shrank in July for an eighth-straight month as orders and employment sank, adding to evidence the U.S. economy has yet to begin a recovery.
Mizuho lost 0.6 percent to finish at 541,000 yen. Mitsubishi UFJ Financial Group Inc., the country's biggest lender by value, declined 0.4 percent to 951 yen after rising as much as 3 percent in the morning.
The Nikkei recorded a 1.8 percent drop in the last five days, while the Topix fell 2.6 percent. Both gauges have declined for the past six weeks, which is the longest stretch of losses for the Topix since September 2001.
European stocks posted the first weekly gain since May, after Citigroup Inc.'s smaller-than-estimated loss outweighed disappointing earnings at Merrill Lynch & Co. and Microsoft Corp.
Royal Bank of Scotland Group Plc and BNP Paribas SA led the Dow Jones Stoxx 600 Banks Index to its biggest three-day advance in five years. Air France-KLM Group, Europe's largest airline, and Daimler AG, the world's second-biggest maker of luxury cars, also rallied for a third day as oil posted a 10 percent weekly decline.
The Stoxx 600 added 1.6 percent to 280.69 Friday, extending this week's gain to 3.8 percent. Shares climbed as Citigroup joined JPMorgan Chase & Co., Wells Fargo & Co. and Nokia Oyj this week in reporting better-than-expected earnings.
Royal Bank, the second-biggest U.K. bank, jumped 10 percent to 197.6 pence. BNP, the largest French bank, gained 6.6 percent to 62.50 euros.
Citigroup reported a second-quarter net loss of $2.5 billion, compared with a loss of $3.67 billion estimated by analysts
Merrill, the third-biggest U.S. securities firm, yesterday posted a net loss of $4.65 billion, exceeding the firm's $1.96 billion first-quarter loss. Microsoft, the world's biggest software maker, posted fourth-quarter profit that trailed analyst estimates and gave a disappointing forecast.
Air France climbed 4.7 percent to 15.88 euros. British Airways Plc, the region's third-biggest, rallied 6.5 percent to 242 pence.
Daimler gained 3.8 percent to 41.09 euros.
Most U.S. stocks fell Friday, led by technology shares, as disappointing results at Google Inc. and Microsoft Corp. overshadowed Citigroup Inc.'s smaller-than- estimated loss, extending the yearlong earnings slump.
The Standard & Poor's 500 Index lost 1.86 point, or 0.2 percent, to 1,258.46 Friday, paring its gain this week to 1.6 percent. The Dow average climbed 36.64, or 0.3 percent, to 11,483.30.
Sixty-seven S&P 500 companies that reported second-quarter earnings missed the analyst estimate by 0.9 percent on average, according to data compiled by Bloomberg. As of the close of trading yesterday, results were running 6.7 percent ahead of forecasts. Analysts project profits fell 16 percent during the period, the fourth consecutive decline. That would be the longest streak in six years, Bloomberg data show.
The combined value of global equities has fallen by about $13.5 trillion since October as more than $447 billion in credit- related losses prolong the global economy's slump and rising commodity prices stoke inflation.
U.S. stocks have fared better than European and Asian equities, measured by the performance of broad benchmark indexes. The S&P 500's 14 percent drop this year compares with losses of 17 percent for the U.K.'s FTSE 100 Index, 21 percent for the German DAX Index and 15 percent for Japan's Topix Index.
Better-than-expected reports from Citigroup, JPMorgan Chase & Co. and Wells Fargo & Co. this week eased investor concern about how much more capital financial institutions need to raise because of the U.S. housing slump. S&P 500 companies in that industry surged more than 20 percent since July 15, the steepest three-day gain on record.
Citigroup gained $1.55, or 8.6 percent, to $19.52 for the biggest advance in the Dow average. The biggest U.S. bank by assets, which is still down 33 percent in 2008, posted a loss of 49 cents a share from continuing operations. That was less than the 60-cent loss analysts estimated on average in a Bloomberg survey. Citigroup took about $7.2 billion of credit-market writedowns.
Merrill Lynch & Co. fell 76 cents to $29.97, limiting financials' advance. The third-biggest U.S. securities firm reported its fourth straight quarterly loss. Merrill lost $4.65 billion as it added $9.7 billion to its tally of credit-market writedowns. Analysts at Citigroup Inc., Oppenheimer & Co. and Wachovia Corp. had predicted the company would book charges of at least $5 billion.
Google fell $50.87, or 9.5 percent, to $482.57. The company posted second-quarter profit of $3.92 a share, excluding costs such as stock compensation. Analysts estimated $4.73 on average in a Bloomberg survey. Google reported a slowdown in the growth of consumers clicking on Web ads and higher-than-expected research and legal expenses.
Microsoft retreated $1.90, or 6.9 percent, to $25.62. The world's biggest software maker reported 2.3 percent less fourth- quarter profit than analysts estimated. The company, whose shares have fallen 28 percent this year, predicted first-quarter earnings as low as 47 cents a share. Analysts polled by Bloomberg anticipated 49 cents a share, on average.
Advanced Micro Devices Inc. fell 13 percent to $4.62, its biggest drop since October 2006 and the most in the S&P 500. The chipmaker reported a wider loss after writing down the value of its 2006 purchase of ATI Technologies Inc. by $880 million. Chief Executive Officer Hector Ruiz resigned, passing the reins to Chief Operating Officer Dirk Meyer.
The S&P 500 Information Technology Index slumped 1.6 percent, its first retreat in four days.