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Bourses droop by midday
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September 2, 1999: 6:07 a.m. ET
Europe's traders clam up ahead of U.S. payroll data; majors all stumble
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LONDON (CNNfn) - Europe's major markets slumped across the board by mid-morning Thursday, shrugging off a partial recovery on Wall Street as traders turned jittery ahead of U.S. jobless data due out Friday.
Technology and chemical stocks were generally weaker, offset by modest gains in utilities and basic industries. Traders will scrutinize the payroll data amid concerns that it may provide the Federal Reserve with a pretext to hike interest rates again when its policy board meets on Oct. 5.
London's FTSE 100 benchmark index dipped 28.6 points, or about 0.46 percent to 6,247.6, weighed down by persistent weakness in banks, while the CAC 40 in Paris extended early losses to trade down 67 points, or 1.45 percent, at 4,566.37. Frankfurt's Xetra Dax also stretched its losses, falling 81.77 points, or 1.54 percent, to 5,235.35.
The SMI in Zurich also slipped further, down 36 points, at 7,058.5.
The slump surprised traders after Wall Street snapped a four-session losing streak Wednesday. After losing around 500 points over four previous sessions, the Dow Jones industrial average added 1 percent, while the tech-heavy Nasdaq composite and broader S&P 500 indexes both made more modest gains.
U.S. markets were expected to open lower, with S&P futures trading down 9.00 points at 1,325.00. Fair value on the index, which takes dividend and interest costs into account, was quoted by London traders at 1,333.11.
The FTSE Eurotop 300, a broader index of the largest pan-European shares, reflected the languid mood as it shed 1.17 percent at 1,293.14. Technology stocks led the decline, joined in the minus column by transport, oil and gas and chemical shares.
In London, the benchmark FTSE 100 was hit by a 2 percent fall in heavyweight Vodafone AirTouch (VOD). British Telecommunications (BT.A) slipped 0.73 percent after announcing a round of retail price cuts.
Banks broadly underperformed. HSBC Holdings (HSBA) lost nearly 2 percent after it said its merger with Republic New York may take longer to complete because of a probe into a Republic unit. Abbey National (ANL) was off 1.93 percent, Lloyds (LLOY) slipped 0.65 percent and Barclays (BARC) lost 1.14 percent as traders exhibited caution ahead of the U.S. jobs data. The banking sector is vulnerable to fluctuations in interest rates, which could be influenced by strong payroll figures Friday.
In Paris, bank CCF (PCCF) headed the gainers list, vaulting 4.59 percent. Chipmaker STMicroelectronics (PSGS) was also strong, with a 1.81 percent advance after announcing a share offer which will dilute government holdings below 5 percent and cut France Telecom's (PFTE) stake from 13.7 to 10 percent.
France Telecom shares lost just over 1 percent despite a report that it would create a joint venture with Suez Lyonnais des Eaux (PLY) to operate the telecom firm's cable network. In the oil sector, Elf Aquitaine (PAQ) was down 1.18 percent after it said it will not embark on merger talks with TotalFina (PFP) until concessions were made. TotalFina lost 1.2 percent.
Frankfurt shed most of Wednesday's gain following upbeat industrial output data and merger activity in the utilities sector.
Auto stocks were an early focus Thursday following strong U.S sales data from the big manufacturers. However, Volkswagen (FVOW) lost 0.6 percent, while DaimlerChrysler slipped more than half a percent.
Viag (FVIA) and Veba (FVEB), the prospective merger partners, were both lower. Viag was down nearly 1 percent, while Veba eased 2.7 percent.
The focus in Amsterdam was the staffing agency Vedior following its $1.8 billion cash bid for Britain's Select Appointments (SLA) to create the world's third-largest employment group. Vedior shares opened 10 percent higher but quickly slid back to trade up 1.17 percent at 16.50 euros. Select lost 0.72 percent after jumping 17 percent Wednesday.
In Italy, Telecom Italia unveiled new measures aimed at expanding the international profile of its mobile phone unit, TIM, and at raising its Internet presence while selling non-core assets.
--from staff and wire reports
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