The G7 statement said the members will “take all necessary steps to unfreeze credit and money markets and ensure that banks and ensure that banks and other financial institutions have broad access to liquidity and funding."
Shares of Morgan Stanley (MS) slumped $2.77 or 22.5% to $9.68, after Moody's Investors Service threatened to reduce the bank's credit rating. Goldman Sachs Group Inc. (GS) lost 12.38%.
Wachovia Corp. surged 43.06% on Friday. Citigroup Inc. advanced 9.13%. Late on Thursday, Citigroup Inc. announced that it is pulling out of bid for Wachovia. The bank also said that it is ending court efforts to block the merger agreement between Wachovia and Wells Fargo. However, Citigroup made it clear that it would still seek breach of contract damages from the two banks.
Shares of Bank of America Corp.(BAC) rose 6.32%. JPMorgan Chase & Co. (JPM) gained 13.52%. General Electric (GE) climbed 13.1%.
Mining giant Alcoa Inc. (AA) gave up 9.71%.
Among energy stocks, Exxon Mobil Corp. (XOM) lost 8.29% while Chevron Corp. (CVX) retreated 9.64%.
General Motors rose 13 cents or 2.73% to $4.89.
Retailer Macy's Inc. (M) plunged 13.44%, after it slashed its sales and profit forecasts. Macy's now expects earnings between $1.30 and $1.50 per share, excluding consolidation costs and impairment charges. That's way below a previous forecast of $1.70 to $1.85 per share and the average $1.76 per share estimated by analysts.
Among the technology stocks, iPhone maker Apple Inc. jumped $8.06, or 9.08 percent, to $96.80. Shares of online auctioneer eBay Inc. (EBAY) gained 4.82%.
Equity markets in rest of the world settled with hefty losses on Friday. U.K. FTSE dropped 381.74 (-8.85%) to 3,932.06. The German DAX and French CAC subtracted 7.01% and 7.73% respectively. Nikkei sank 9.62% on worsening credit crisis. Benchmark indices in Australia, Thailand, Hong Kong and India were all down at least 7%. In Indonesia, authorities suspended trading indefinitely on the Jakarta Stock Exchange after they had halted trading on Wednesday when the benchmark index tumbled more than 10%.Regulators in Russia too ordered Moscow's ruble denominated MICEX not to open for regular trading at the usual time, and the opening of the dollar denominated RTS was also postponed until further notice, the state-run RIA-Novosti news agency said.
Money market remained frozen on Friday as well. The cost of borrowing in dollars for three months rose as high as 7 basis points on Friday, from 4.75% on Thursday. The Libor-OIS spread surged to a record 359 basis points.
On the front of economic data, a Commerce Department release on Friday showed that US trade deficit narrowed by 3.5% to $59.1 billion in August.
On Friday, NYMEX Crude Oil for November delivery dropped $8.89, or 10.3%, to close at $77.70 a barrel.
Disclosure: Author does not own any of the stocks discussed here.
