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Three Asian banks' heavy exposure to the limping U.S. home loan sector reinforced global credit wobbles on Friday but Germany, France and Italy saw no signs of new problems.

European shares fell by midday on Friday, breaking a tentative five-day recovery and tracking weakness in Asia as credit worries returned to the forefront to take financial stocks lower.

U.S. stocks dipped on Thursday as investors worried about the economic outlook after the head of the biggest U.S. mortgage company said the housing downturn could create a recession.

Countrywide Financial Corp Chief Executive Angelo Mozilo warned on Thursday that the housing downturn is likely to lead the country into recession, but called speculation that the largest U.S. mortgage lender might go bankrupt irresponsible and baseless.

Stocks declined on Thursday after the chief executive of Countrywide Financial Corp said the housing market was certainly not getting better and could push the economy into a recession. The comments offset optimism about a $2 billion injection into Countrywide, the biggest U.S. mortgage lender.

Countrywide Financial Corp was expected to lead financial shares higher on Thursday after receiving a $2 billion injection from Bank of America Corp, easing fears the largest U.S. mortgage lender could go bankrupt and boosting optimism the sector will weather a credit shortage.

Countrywide Financial Corp on Wednesday received a $2 billion injection from Bank of America Corp, helping the largest U.S. mortgage lender shore up its finances as it struggles with a liquidity crunch.

Industrial and Commercial Bank of China Ltd, the world's biggest bank by market capitalisation, beat forecasts with a 61.6 percent jump in first-half profit, helped by widening interest margins and fee income growth.

European shares rose in early trade on Thursday, tracking sharp gains made by U.S. and Asian stocks overnight as equity markets continued to recover from a recent correction sparked by fears over a credit crunch.

The yen fell broadly and higher-yielding currencies strengthened on Thursday as calm returned to troubled credit markets and rising equities signaled increased investor appetite for risk.

Online brokerages TD Ameritrade Holding Corp and E*Trade Financial Corp have been in serious merger discussions for weeks but are not close to a deal, the Wall Street Journal reported on Wednesday, citing people familiar with the matter.

Billionaire investor Warren Buffett may buy parts of beleaguered mortgage lender Countrywide Financial Corp, some investors are speculating, according to The Wall Street Journal.

Countrywide Financial Corp shares leaped higher on Friday after the U.S. Federal Reserve lowered a key borrowing rate, making it easier for lenders to obtain credit.

The U.S. mortgage meltdown has crushed dozens of lenders and is causing severe liquidity problems at the largest, Countrywide Financial Corp.

Countrywide Financial Corp., the largest U.S. mortgage lender, said on Thursday it drew down an entire $11.5 billion bank credit line as a global credit crisis limits its access to short-term cash.

Facing continued deterioration in the U.S. housing market, upscale home builder Hovnanian Enterprises Inc. said on Monday that it expects to take a charge of $90 million to $110 million related to land impairments and write-offs.

Investors worry that deteriorating borrowing conditions will saddle lenders -- and not just Citigroup -- with too many soured investments.

A New York lawmaker said on Monday she plans to offer legislation to address some of the problems plaguing credit card customers who have been blindsided with interest rate changes and various fees.

Kimberly-Clark Corp. said on Tuesday that quarterly profit jumped 22 percent as savings from its restructuring plan helped offset increased fiber costs, and the company raised its full-year earnings forecast.

Move is one in a series of tightening steps aimed at keeping inflation under control.

Citigroup Inc., the largest U.S. bank, said on Friday that strong international growth fueled a higher-than-expected 18 percent increase in quarterly profit. Revenue rose faster than expenses for a second consecutive quarter, as Chief Executive Charles Prince continued to emphasize controlling costs.

Bank of America Corp. Chief Executive Kenneth Lewis pledged on Thursday to complete the $21 billion acquisition of all of LaSalle Bank from ABN AMRO Holding NV early in the fourth quarter.

Bank of America Corp., the second-largest U.S. bank, said on Thursday quarterly profit rose 5 percent, as private equity and investment banking gains offset lower retail banking earnings and worsening loan quality.

JPMorgan Chase & Co. said on Wednesday it tripled the amount it set aside for loan losses as home equity borrowers missed payments, hurting the bank's second-quarter net income growth.

Discount brokerage Charles Schwab Corp. posted a 16 percent increase in second-quarter profit on Tuesday as new policies to attract clients paid off.

The takeover battle for ABN AMRO heated up on Monday with the Royal Bank of Scotland consortium boosting the cash element of its 71.1 billion-euro ($98 billion) offer. The offer is above a rival all-stock bid from Britain's Barclays that is worth about 64 billion euros, which has been recommended by ABN's board.

Dutch bank ABN AMRO can proceed with its sale of U.S. unit LaSalle, the Dutch Supreme Court said, boosting the prospect Barclays will succeed in its near $90 billion takeover bid for ABN.

The Dutch Supreme Court will issue its ruling on ABN AMRO's suspended sale of its U.S. unit LaSalle on Friday and the decision could sway an acrimonious takeover battle for the Dutch bank.

Milan judge has ordered Bank of America to stand trial for alleged market-rigging by some of its employees in connection with Italian dairy firm Parmalat's collapse.