Homebuilder McInerney led the recovery with a 31% rise on the week to end at 1.70 . . . a big turnaround after an unfavourable trading update two weeks ago had prompted a sell-off in its shares.

Financials were climbing out of the hole, too, with Irish Life & Permanent recording an increase of 15.76% to 18 by Friday's close.

Finance Ireland, former IL&P chief executive Billy Kane's specialist finance company, was the exception as it lost 16.55% of its value on news that Kane had sold the firm's 40% stake in emerging subprime lender Nua to South African investment bank Investec. Independent News and Media ended the week nearly 17% higher than its Monday opening.

European stocks climbed for a fourth week as investors speculated that contagion from the worst US housing slump in 16 years has been contained.

Fortis, part of a group seeking to acquire ABN Amro Holding, and UBS led banking shares to their biggest weekly gain since March.

Hagemeyer, the world's third-largest electrical-equipment supplier, rallied to a one-month high on speculation Rexel of France may make a bid.

The Dow Jones Stoxx 600 Index added 2.4% to 386.93. Banks were the best performers among 18 industry groups, climbing 5.9%.

Bear Stearns, the securities firm hit hardest by subprime-mortgage losses, and Citigroup signalled that the worst of the credit crisis is over.

The biggest US bank said it expects earnings to return to "normal'' in the fourth quarter after reporting an unexpected profit decline.

National benchmarks rose in all 18 western European markets, except in Norway and Finland.

Germany's DAX added 1.8%, while France's CAC 40 gained 2.2%. The UK's FTSE 100 advanced 2%. The Stoxx 50 rallied 2.2%, and the Euro Stoxx 50, a measure for the euro region, increased 1.7%.

Indices extended gains after a US report said employment accelerated in September and revised figures for August showed an unexpected advance, easing concern the world's biggest economy was sliding into a recession.

UBS, Europe's biggest bank by assets, gained 8.6% on investor optimism that its report on fixed-income losses may represent the low point for earnings. The Swiss bank said it had a third-quarter loss and plans to cut 1,500 jobs after writing down the value of mortgagebacked securities.

Fortis rallied 10%. Belgium's biggest financial-services company won EU approval to buy some of ABN Amro's Dutch assets. Barclays abandoned a six-month battle to buy ABN Amro after investors failed to back its bid, clearing the way for the group led by Royal Bank of Scotland to complete the biggest banking takeover.

Shares of Hagemeyer jumped 23%, the best performance in the Stoxx 600 Index.

Abbot Group soared 21% to an 18-year high. The largest drilling contractor in the North Sea said it received takeover proposals that may lead to a bid for the company.

3i Group, Europe's second-biggest publicly traded private equity firm, offered 375 pence for Abbot, the Financial Times reported.

MILESTONES

MICROSOFT'S Halo 3 video game for Xbox 360 racked up $70m in sales in its first 24 hours on the shelves, giving it a better opening day "box office" than Spider Man 3, the film with the highest worldwide oneday gross return. Halo went on deliver $300m in its first week and helped double global sales of the Xbox 360, according to Microsoft.

NUMBERS

DUBLIN ISEQ 8,478.48 UP 7.54% .LONDON FTSE 100 6,596.80 UP 1.99% .

EUROPE DJ STOXX 50 4,455.31 UP 1.68% .NEW YORK Dow 14,066.01 UP 1.23% NASDAQ 2,780.32 UP 2.92% .OIL Brent = $77.54 DOWN 1.65% .

EURO/DOLLAR 1= $1.4137 DOWN 0.69%

Equity movers

IRISH SHARES GAINERS
Company Price + % McInerney Hldg 1.70 30.77% Indpnt N&M 3.05 16.86% Irish Life&Pmt 18.00 15.76% Dragon Oil 3.83 15.71% Newcourt Group 1.48 13.85% Siteserv 0.60 13.21% Kingspan 17.35 12.66% TVC Holdings 1.25 11.61%
LOSERS Company Price - % Finance Ireland 0.48 16.52% Petroceltic 0.14 6.67% Petroneft Res 0.46 6.12% Datalex 0.71 5.33% Trintech Grp $4.08 4.00%
INTERNATIONAL GAINERS Company Price + % Blackstone Grp $28.83 15.14% Barclays 660p 10.83% Fortis 22.71 9.98% Morgan Stanley $68.60 8.89% UBS 67.95 Sfr 8.55% Debenhams 102.25p 8.49% Royal Bk Scotland 569.5p 8.48% Merrill Lynch $77.01 7.98% BNP Paribas 82.41 7.39% W y e t h $ 4 7. 7 0 7. 0 5 %
LOSERS Company Price - % Northern Rock 185.5p -11.55% Statoil 174.25 NoK -5.17% Vodafone 169.9p 3.74% Total 54.95 3.63% Nokia 25.84 3.08%

The week ahead

MONDAY ECB president Jean-Claude Trichet speaks in Frankfurt Construction PMI UK industrial production, producer prices German industrial prices US public holiday Results: Petroceltic, Bang & Olufsen
TUESDAY Ibec HR leadership summit, Four Seasons, Dublin SFA Reach seminar, Galway Minutes of Federal Reserve August monetary committee meeting Trichet addresses EU parliament's economic and monetary affairs committee UK external trade German external trade, industrial output Results: Alcoa
WEDNESDAY Japan interest rate decision US federal budget Results: C&C, Monsanto
THURSDAY ECB monthly bulletin Consumer prices, construction employment EZ GDP UK RICS house prices US external trade Results: M&T Bank, WH Smith, PepsiCo
FRIDAY Industrial production, earnings in distribution and business services, international investment position EZ industrial output US retail sales, producer prices, business inventories, University of Michigan consumer confidence

The week that was

He said the government must review its regulation of complex securities . . . like the instruments Ormond was trading in . . . because they lacked transparency and their uncertain valuations had led to the current credit crunch. He also called for better cooperation between national regulators where cross-border subsidiaries were involved. The German regulator, Bafin, had warned the Irish Financial Regulator about Ormond as early as 2004, but no action was taken in Dublin to reign in the conduit's risky transactions.

However, Bruton also criticised "damaging speculation that the Irish regulator was in some way at fault" over Ormond Quay, calling it "totally unfair".

BARCLAYS THROWS IN TOWEL

A CONSORTIUM led by Royal Bank of Scotland now looks set to win the six-month battle for ABN Amro after rival bidder Barclays abandoned its bid for the Dutch bank early Friday after failing to win support from its investors.

RBS, Banco Santander and Fortis will now pay just shy of 72bn in the largest bank takeover in history.

Barclays' offer came in at 14% below the rival group and only attracted the support of 0.2% of ABN Amro stockholders. The takeover will come in at about three times the bank's book value, according to data compiled by Bloomberg, which has led analysts to say it is too expensive, especially in the context of distressed debt markets.

The takeover battle began in April when mergers and acquisitions globally were running at a record pace, fuelled by cheap money and easy credit, and ends at a time when takeovers have slowed amid turbulence in credit markets and concern economic growth will dwindle. Barclays itself was scuppered by the turbulence, which has caused its shared to shed 15% of their value over the bid period.

UNEMPLOYMENT, SLOWER GROWTH, PROZAC SALES UP THE Central Bank let some air out of the balloon in its quarterly economic bulletin late Friday when it cut its economic growth forecast for next year from 4% to 3.25%, citing an expected decline in domestic demand.

The recalibration comes amid a quarter of turmoil in the financial markets and a declining property market. The Central Bank flagged a number of downside risks for the year ahead, including a slowdown in the US economy, which could affect trade in inward investment, and the broad repricing of risk in the financial markets.

On the bright side, more moderate growth should have a positive impact on inflation, the bank said, predicting an increase in harmonised consumer prices of just 2.25% compared to this year's 2.75%.

But slower growth will also mean a slight uptick in unemployment.

Friday's live register already showed a 1.3% rise in the number of people collecting unemployment benefits, bringing the growth rate over the last three months to its highest point since December 2003, according to the Central Statistics Office.

BRUTON BITES DOWN ON CREDIT CRUNCH FINE

Gael finance spokesman Richard Bruton said the government had left Ireland exposed to "major systemic vulnerabilities" and ignored warning signs that the country's financial stability was coming under threat.

In a speech on the Markets in Financial Instruments Bill 2007, Bruton made good on his promise to raise questions in the Dail about the overseeing of debt securities in Ireland, but stopped short of actually criticising the Financial Regulator over the 17.3bn collapse of Ormond Quay, an unregulated funding conduit of German bank Sachsen LB, which has a subsidiary in the IFSC.

Iseq Index last week