|
Europe markets dip
|
 |
December 20, 2001: 12:15 p.m. ET
Telecom stocks slump after weak forecast from Juniper
|
LONDON (CNN) - European markets closed slightly down on Thursday, led by telecom stocks, after U.S. company Juniper Networks issued a profit warning.
Telecom equipment providers were hit by a warning from Juniper that its fourth-quarter earnings will fall short of analysts' expectations by as much as 50 percent and revenues would also be disappointing due to the continuing weak environment and caution by its customers.
French telecom equipment maker Alcatel (CGEP) fell 5.7 percent, while Swedish mobile operator Ericsson lost 3.6 percent.
"The high beta sectors, such as technology and basic resources, that have led the market rally since September 11 look somewhat overvalued," Thierry Lacraz, a European market strategist for Geneva-based Pictet & Cie fund, told Reuters.
Concern over U.S. wireless giant Motorola (MOT: down $0.67 to $15.09, Research, Estimates) decision to cut jobs and lower sales forecast continued to put pressure on European stocks
London's FTSE 100 fell 0.8 percent to 5,080.2 and the CAC 40 blue chip index in Paris also fell 0.9 percent to 4,426.7, while Frankfurt's electronically traded Xetra Dax was down 0.6 percent to 49.53.9.
The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was down 0.5 percent.
Diageo, the largest liquor maker, rose 3.5 percent after U.S. regulators gave permission for it to buy Seagram liquors in a joint $8.15 billion takeover with France's Pernod Ricard.
Argentina's deepening and increasingly violent crisis weighed on Spanish Telefonica and Spain's big banks which have exposure to the country.
Madrid's Ibex 35 benchmark index fell 1.1 percent, led by its three biggest companies which have big exposures to Argentina, where Economy Minister Domingo Cavallo and the entire cabinet offered to quit.
At least seven people died in rioting and looting and the government declared a state of seige.
Santander Central Hispano dropped 2.9 percent, Banco Bilbao
Vizcaya Argentaria fell 1.5 percent and Telefonica gave up 0.7 percent.
"Argentina's problems seem to be mounting with negative consequences for the country's debtors and many quoted European companies," Pictet's Lacraz told Reuters.
"We do not think that the crisis will destabilise the global economy but it does reduce visibility for the banking sector until we know how the story will pan out," he said.
Italian soccer club Juventus failed to score with investors, losing nearly 5.8 percent on its market debut in Milan.
The club fell to  3.4 euros compared with a flotation price of 3.7 a share.
In Amsterdam, the AEX index edged down 1.1 percent and the SMI in Zurich rose 1.7 percent, while Milan's MIB30 index dipped 1.2 percent.
In the U.S. stocks drifted lower, with investors scaling back a little from the recent rally on the weak Juniper forecast.
By midday the Nasdaq composite lost 43.48 points to 1,939.41. The Dow Jones industrial average gave back 41.91 to 10,029.17, while the Standard & Poor's 500 pulled back 4.84 to 1,144.72. 
|
|
|
|
|
|
|
