NEW YORK (AFP) - An early rally on Wall Street fizzled Friday as global bourses finished mixed amid a range of worries that included Italy's messy budget dispute with Brussels and slowing Chinese growth.
US stocks opened strongly following good earnings reports from Procter & Gamble, American Express and others, but the market lost steam at midday. All three major indices had slumped more than one percent on Thursday.
"In a week when developments seem more mixed than bearish, markets are struggling to stabilize from an early-October shock that began in Bonds and ended in Equities," JPMorgan Chase said in a research note.
The analysts said earnings would be a positive catalyst for stocks over the next two or three weeks, but warned of a medium-term hit after the period of "peak" earnings growth ends.
The Nasdaq was the worst performing of the three major indices, ending down 0.5 percent at 7,449.03, following a session in which it swung more than 150 points.
The S&P 500 finished with a small loss, while the Dow edged higher.
In Europe, the Frankfurt and Paris bourses declined, while London rose as Italy's fight with Brussels over its budget plan sparked worries about the eurozone.
On Thursday, the European Commission formally warned Italy that its budget plans for 2019 were a serious concern, demanding "clarifications" over Rome's "unprecedented" deviation from EU rules.
Late Friday afternoon, Moody's downgraded Italy's debt rating by a notch, citing the "material weakening in Italy's fiscal strength, with the government targeting higher budget deficits for the coming years," as well as debt holding near the current 130 percent of GDP "rather than start trending down as previously expected."