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World stock markets attempt rebound from rout

John BIERS, Roland JACKSON
It has been a volatile week for traders as rising US bond yields sent stock investors heading for the door

Global stock markets attempted to rebound Friday with mixed results one day after ferocious losses sparked by worries over rising US interest rates and the fallout from trade fights.

Wall Street stocks finished a gloomy week on a high note, with the S&P 500 advancing 1.4 percent. But the session was hardly drama-free and included a midday swoon that briefly took the Dow into negative territory.

Even with Friday's gains, the S&P 500 lost 4.1 percent for the week, its worst since March.

Asia enjoyed healthy gains, with Hong Kong surging 2.1 percent, Shanghai up 0.9 percent and Tokyo adding 0.5 percent, at the end of a bruising week for investors worldwide.

Europe initially chased Asia higher but gave up gains as the closing bell approached. London and Paris ended the day down 0.2 percent, while Frankfurt gave up 0.1 percent.

"Markets appeared to remain skittish regarding the recent rise in bond yields and resurfaced worries that the US Fed could be heading toward a policy mistake," said a note from Schwab.

Other analysts saw at least some signs of improvement.

"The brutal selloff that engulfed global stocks this week took a pause on Friday as risk sentiment slightly improved across financial markets," said analyst Lukman Otunuga at trading firm FXTM.

- Efforts at reassurance -

This week's pullback was sparked by a jump in US Treasury yields, along with worries about trade conflicts and high valuations.

But markets appeared reassured by comments from US Treasury Secretary Steven Mnuchin, who said Friday the sell-off was not surprising.

"I think the fundamentals are still very strong. The US economy is strong, US earnings are strong," Mnuchin told CNBC. "So I see this as just a natural correction after the markets were up a lot."

Mnuchin also downplayed concerns about US President Donald Trump's repeated and aggressive attacks on the US Federal Reserve this week, saying Trump "respects the independence of the Fed."

Solid earnings from JPMorgan Chase and other large banks also boosted sentiment.

"The market responded very well to the bank earnings," said Quincy Krosby, chief market strategist at Prudential Financial. "We saw buyers come in and take advantage of the weakness."

But some analysts say the most important barometers of US corporate health have yet to report.

"If you want to get a read on how this market is going to react to earnings this reporting period, we'd argue that it isn't the reaction to the financial stocks that matters most," said Briefing.com analyst Patrick O'Hare.

"What matters more is the reaction to the guidance from the industrials and materials companies, which have wider exposure to the elements that have the market on edge about the earnings growth outlook: currency pressures, tariffs, foreign slowdowns, higher costs, and challenging comparisons."

- Key figures around 2100 GMT -

New York - Dow Jones: UP 1.2 percent at 25,339.99 (close)

New York - S&P 500: UP 1.4 percent at 2,767.13 (close)

New York - Nasdaq: UP 2.3 percent at 7,496.89 (close)

London - FTSE 100: DOWN 0.2 percent at 6,995.91 (close)

Paris - CAC 40: DOWN 0.2 percent at 5,095.98 (close)

Frankfurt - DAX 30: DOWN 0.1 percent at 11,523.81 (close)

EURO STOXX 50: DOWN 0.5 percent at 3,194.41 (close)

Tokyo - Nikkei 225: UP 0.5 percent at 22,694.66 (close)

Hong Kong - Hang Seng: UP 2.1 percent at 25,801.45 (close)

Shanghai - Composite: UP 0.9 percent at 2,606.91 (close)

Euro/dollar: DOWN at $1.1559 from $1.1593 at 2100 GMT on Thursday

Pound/dollar: DOWN at $1.3154 from $1.3230

Dollar/yen: UP at 112.18 from 112.16 yen

Oil - Brent Crude: UP 17 cents at $80.43 per barrel

Oil - West Texas Intermediate: UP 37 cents at $71.34 per barrel

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