It is shaping up to be another tough day for the market as traders continue to express concerns over a possible recession, disappointing earnings numbers, surging crude oil prices and persistent weakness for the U.S. dollar. However, not all the companies are joining the general market anxiety, and Swiss Re made strong gains, trading up 4.9% in the Zurich exchange, despite a plunge of 87% in its fourth-quarter net profit as investors were encouraged by its positive earnings outlook.

The world's largest reinsurer announced that its quarterly profit had dropped to 170 million Swiss francs ($161.7 million), dragged down by higher write-downs related to bad loans. Its profit numbers were down from 1.3 billion reported in the same period a year ago.

Despite its drop in profit, Swiss Reinsurance is not too disappointed with its current earnings. The insurer stated that its mistakes from the past came as a good lesson to learn and showed its confidence that "we have a stronger organization."

Surpassing difficulties related to credit default swap, Swiss Reinsurance said that premiums reached almost 19 billion francs ($18 billion) in 2007. As a result, the company's combined ratio, which compares costs and claims to premium income, saw a growth of 3 basis points to 90.2%, better than analysts' expectations of 93.1, on average.

For all 2007, the group reported a lower-than-expected 9% decline in net profit at 4.16 billion ($3.96 billion), slightly above the 4 billion francs ($3.81 billion) that analysts forecast. Based on its positive earnings, the company showed confidence over further gains and issued an optimistic earnings outlook.

Swiss Re lifted its return on equity target to 14% from 13%, but held its forecast for 10% earnings per share growth. The group also raised its dividend by 18% to 4 francs per share, as a "further sign of our confidence in the future earnings power of the firm."

Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.