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European techs, banks fall
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July 20, 2001: 12:07 p.m. ET
London hits 17-week low on bad news from U.S. bellwethers; banks fall
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LONDON (CNN) - European markets closed sharply lower Friday after downbeat U.S. forecasts rattled technology stocks.
U.S. technology bellwethers Microsoft, Gateway (GTW: Research, Estimates) and Nortel (NT: Research, Estimates) all had a negative impact on markets after reporting after the bell in the U.S.
And IT sector research firm Gartner Dataquest added to the misery after saying global sales of PCs had fallen for the first time in 15 years. The report worsened ongoing concerns over the state of the U.S. economy.
Microsoft (MSFT: Research, Estimates) said the slump in the PC industry had hit sales of its Windows programs, which run 90 percent of all personal computers, and said this quarter's sales will miss forecasts.
There also was bad news in Europe, with Britain's third-biggest company, Vodafone (VOD), reporting the launch of its third generation of Internet enabled cell phones will be pushed back to 2003 due to a potential shortage of handsets.
London's FTSE 100 index fell 50.3 points, or 0.9 percent, to a 17-week closing low of 5,387.1 as Vodafone slid 4.5 percent to a three-year low of 140.1 pence.
Vodafone's warning battered telecom equipment makers across the continent. Beleaguered telecoms equipment company Marconi (MONI) lost 3.8 percent.
Sweden's Ericsson, which earlier rose after reporting losses in line with expectations, reversed course, sliding almost 2 percent. Vodafone is one of its biggest clients and Ericsson is the biggest supplier of wireless network gear to telecom operators.
Cross-boarder rival Nokia, the world's biggest cell phone supplier, dropped 4.8 percent. The Finnish company reported a 2 percent decline in wireless network sales as telecom operators worldwide slash spending.
The London Stock Exchange (LSE:LSE), Europe's biggest, listed on its own bourse Friday but shares in the 200-year-old market failed to dazzle, sliding 5.2 percent.
In Paris, the CAC 40 blue chip index fell 49.69 points, or 1 percent, to 4,880.70, with Europe's top computer services group Cap Gemini Ernst & Young (PCAP) falling 4 percent despite denying speculation that it would issue a profit warning.
Europe's fourth-largest telecom equipment maker, Alcatel (PCGE), tumbled 7.3 percent after investment bank Dresdner Kleinwort Wasserstein lowered Alcatel's 2001 revenue expectations to a 12 percent decline from a 7 percent decline ahead of Alcatel's second-quarter results.
France Telecom (PFTE) dropped 2 percent and software firm Dassault Systemes (PDSY) was off 3.4 percent.
Frankfurt's late-trading Xetra Dax fell 76.47 points, 1.3 percent, to 5,753.22, led lower by one of Germany's biggest banks, HypoVereinsbank (FHVM), down 5.8 percent.
Other banks fell back from Thursday's gains. Dresdner Bank (FDRB) lost 5 percent and Deutsche Bank (FDBK) shed 2 percent.
Drugmaker Schering (FSCH), the world's biggest producer of birth-control pills, was 3.2 percent lower after the University Medical Center in Utrecht, Netherlands, published a report saying woman are 1.7 times more likely to suffer from blood clots from Schering's "third-generation" contraceptive pills.
DaimlerChrysler, the world's third-biggest automaker, rose 2.2 percent after losses at its U.S. Chrysler unit narrowed.
ASML, the world's largest semiconductor equipment maker, lost 4.3 percent in Amsterdam and Europe's biggest chip designer ARM Holdings (ARM) slid more than 4 percent in London.
Infineon Technologies (FSIE), Europe's second-largest chipmaker, rose 2.3 percent ahead of its second-quarter earnings on Monday. The company already has warned it will miss expectations.
In Amsterdam, the AEX index shed 0.9 percent while the SMI in Zurich was down 0.8 percent. Milan's MIB30 was 0.4 percent lower.
The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was down 1 percent, with the computer services, information technology and telecom sub-indices all in negative territory.
There was a similar picture across the Atlantic, Wall Street headed south as investors came to terms with Microsoft's gloomy third-quarter forecast. The Nasdaq composite fell 19.43 points, or 1 percent, to 2,027.16, while the Dow Jones industrial average slipped 42.76 points, or 0.4 percent, to 10,567.24.
In the currency markets, the euro was little changed against the U.S. dollar, trading at 87.14 U.S. cents compared with 87.09 cents in late New York trading Thursday. 
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