European shares closed down 2.5%. Banks led the sell-off with investors spooked by the idea that the US government may have to rescue America’s largest providers of financing for home loans Fannie Mae and Freddie Mac which would have a major effect on the world’s largest economy.
Credit Agricole lost almost 7% on a report that the bank’s chief executive and chairman may quit at next week’s board meeting. Record oil prices hit car makers and airlines… Europe’s biggest carrier Air France-KLM fell 6.4%. The dollar slipped against the euro and gold rose.