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Europe falls back again
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October 13, 1999: 12:54 p.m. ET
Major markets lose 1% as weak U.S. earnings dampen sentiment; euro gains
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LONDON (CNNfn) - European stock markets suffered a second session of heavy selling pressure Wednesday as mixed U.S. earnings reports weighed on bond prices to send equity investors scurrying for the exits.
The prospect of deals in the telecom and publishing sectors did little to boost sentiment, with telecoms racking up heavy losses on profit taking.
London's benchmark FTSE 100 closed 61.4 points, or 0.99 percent, lower at 6,113.40, 34 points above its session low.
The CAC 40 in Paris was again the weakest major market as it shed 55.6 points, or 1.2 percent, to end at 4,602.85.
The Xetra Dax fared little better, losing 63 points, or 1.18 percent, during the session to finish at 5,295.43. The SMI in Zurich gave up 1.01 percent to close at 6,952.30.
The FTSE Eurotop 300, a gauge of the largest pan-European stocks, finished off 1 percent. Oil and gas shares rose 1.8 percent on firmer energy prices, but other sectors lost ground.
Computer makers were worst hit in the wake of Intel's (INTC) disappointing third-quarter earnings Tuesday, sending European stocks in the sector down 4.3 percent. Aerospace shares fell 3.5 percent following Raytheon's (RTN.A) profits warning.
Telecom shares fell 2.4 percent despite regulatory clearance for a $47 billion merger in Scandinavia.
The euro continued its strong run, peaking at $1.08 before slipping back to $1.0761, helped by a weakening yen after the Bank of Japan loosened its monetary policy. The single currency also gained more than 1 percent against the yen, rising to 115.50.
A rally in telecom and utility shares amid sector consolidation has helped lift London in recent session, but the trend reversed Wednesday as investors took gains and some merger rumors died away.
Sentiment was further dented by a stronger-than-expected rise in U.K. average earnings, up 4.9 percent in the three months to Aug. 31, which could hasten a rise in interest rates.
Only oil stocks propped the FTSE above the 6,100 level. BP Amoco (BP.A) and Shell (SHEL), its first and fourth-largest constituents, gained 3.3 and 0.7 percent respectively. BP fell from its earlier peak but still topped the gainers on the FTSE.
Overall, declines outnumbered gains by four to one on turnover of little under 1 billion shares.
As investors pulled back from telecoms, British Telecommunications (BT) was left nursing a 2.75 percent decline while Vodafone AirTouch (VOD) was even worse hit, shedding just over 5 percent after its recent strong run.
Cellular operator Orange (ORA) lost 3.5 percent and network operator Energis (EGS) was the FTSE's worst performer, losing 5.12 percent as speculation of a possible takeover bid weakened.
Publishing company Reed (REED) added 2.5 percent after being linked with renewed merger talks with Dutch publisher Wolters Kluwer.
British Aerospace (BA.) shed 4.5 percent on the back of Raytheon's problems and its admission that all the benefits of its purchase of assets from GEC may not come in the next financial year.
In Frankfurt, the Dax ended close to its session low, weighed by a 6.1 percent slump in business software maker SAP (FSAP) after it cut its 1999 sales forecast . SAP was also the worst-performing stock Tuesday.
Siemens (FSIE) and DaimlerChrysler (FDCX) fell 2.7 and 0.4 percent respectively after news of delays in the high-speed rail project in which the pair are partners.
Daimler was boosted by buoyant German auto sales data that showed the country's exports climbed 14 percent in September. Volkswagen (FVOW) ended narrowly down despite forecasting record full-year deliveries of 5 million cars.
Among weak financial stocks, Dresdner Bank (FDRB) was worst affected as it shed 2.83 percent while Commerzbank (FCCB) ended 1.4 percent down.
Retailer Karstadt (FKAR), a heavy decliner Tuesday, made the best advance as it added 1.1 percent.
In Paris, chip maker STMicroelectronics (PSGS) lost 2.9 percent in Intel's wake, but network telecom firm Equant (PEQU) headed the decliners as it shed almost 4 percent.
Concerns about earnings in the defense sector pulled Thomson-CSF (PHO) down 3.1 percent.
Only TotalFina (PAQ) managed to make any headway, gaining 2.7 percent in line with other oil stocks.
Weaker financials pulled Zurich down, with Credit Suisse off 2.1 percent and UBS off 1.5 percent. Swisscom bucked the sector trend with a 1.7 percent advance. 
-- from staff and wire reports
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