European markets helped by oil, Dow down

LONDON — European markets rose strongly Friday as a recovery in the price of oil helped oil stocks, but Wall Street was down after further grim U.S. economic news.

The FTSE 100 index of leading British shares was 201.62 points, or 5.2 percent, higher at 4,063.01, while Germany's DAX was up 158.52 points, or 3.4 percent, at 4,781.33. France's CAC-40 was up 148.92 points, or 4.7 percent, at 3,329.92. Europe's indexes were higher through the day in the wake of the Dow's strong performance Thursday and the recovery on Japan's Nikkei.

On Friday, the Dow Jones index underperformed Europe's indexes, trading 46.28 points, or 0.5 percent, lower at 8,932.98 after further evidence emerged that the U.S. is heading for a deep and protracted recession.

The Commerce Department reported that housing starts fell more than 6 percent in September to an annual rate of 817,000 units, a near 18-year low, while and the University of Michigan said its U.S. consumer confidence index slumped to 57.5 in October from 70.3 the previous month.

"The drop back in U.S. consumer confidence in October suggests that the meltdown in the financial markets, rising unemployment and the continued weakness in housing more than offset any positive boost from lower gasoline prices," said Paul Ashworth, senior U.S. economist at Capital Economics.

It's been an erratic week on Wall Street, with the Dow soaring 936 points on Monday, slipping moderately Tuesday, sinking 733 points Wednesday, and then rallying 401 points Thursday. The volatility is not providing investors with much relief, but it is a welcome change from last week's seemingly relentless plunge, during which the Dow logged its worst week ever and Wall Street lost about $2.4 trillion in shareholder wealth.

The long-term key to the health of financial markets is whether the flurry of activity by governments over the last week or so can actually break the logjam in credit markets.

There are growing signs the coordinated interest rate reductions announced last week, and massive liquidity boosts by central banks, are beginning to reduce lending rates between banks.

The interbank lending rate for three-month dollar loans fell for the fifth day running, the first weekly decline in three months. It dropped 0.08 percent to 4.42 percent, while the three-month Euro Interbank Offered Rate, or Euribor, fell almost 0.045 percentage points to 5.045 percent.