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Bad news drags Europe
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July 24, 2001: 11:59 a.m. ET
Profit warnings and dim outlook weight on markets in Europe
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LONDON (CNN) - Europe's top bourses ended lower Tuesday, after industrial conglomerates ABB and Invensys issued profit warnings and US news was poor.
ABB, Europe's biggest electrical engineering group, posted a 40 percent fall in first-half profits and plans to axe 12,000 jobs. It also revised downwards its forecast for full-year income. ABB dropped nearly 17 percent in Zurich.
UK rival Invensys also announced on Tuesday it was cutting another 1,000 jobs, bringing to 6,000 the number of cuts this year by the company, which makes automation systems for industry.
London's FTSE 100 closed 1.6 percent lower at 5,320.2, as Invensys (ISYS) fell nearly 15 percent after lowering profit expectations and saying markets were too volatile for it to give guidance on the second half.
Invensys also said it was "seeing the worst U.S. industrial recession since the 1970s."
Reuters Group (RTR), the world's biggest news and financial data provider, fell 4.8 percent after reporting its first-half net profit fell 20 percent and it planned to cut 1,340 jobs.
ARM Holdings (ARM), Europe's biggest chip designer, closed 0.9 percent higher, extending the previous session's gains after posting a stellar set of results that bucked profit warnings and lower earnings from chipmakers.
In Paris, the CAC 40 blue chip index finished off by 1.2 percent at 4,855.60, with six of the top 10 decliners coming from what used to be referred to as the "old economy".
The world leader in dairy products, Danone (PBNP), topped the losers, ending the day down by 3.6 percent. Europe's No. 4 telecom equipment maker Alcatel (PCGE) dropped 3.5 percent.
Train and turbine maker Alstom (PALS) fell 3.4 percent and Schneider Electric (PSU) lost 2.2 percent after rival ABB's profit warning.
Among others affected by ABB's warning, German communication and engineering titan Siemens (FSIE) lost 6.8 percent.
Vivendi Universal (PEX), Europe's biggest media company, rose 1.4 percent, extending Monday's gains, after saying second-quarter earnings jumped 53 percent.
Dassault Systemes (PDSU), a French software company, climbed 7.2 percent to top the gainers in Paris. The company said second-quarter net income edged up 4 percent.
Frankfurt's electronically traded Xetra Dax lost 1.7 percent to 5,693.09, as shares in financial services firm MLP fell 8.9 percent in their second day of trading on the blue-chip index, extending falls from Monday as analysts and traders said the stock was overvalued.
In Amsterdam the AEX index ended 0.6 percent lower, while the SMI in Zurich was off by 1.8 percent. Milan's MIB30 index dipped 0.2 percent.
The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was down 1.5 percent, with the electronics and electrical sectors falling 6.2 percent while steel and mining dropped more than 4 percent.
Wall Street wobbled early Tuesday as investors digested some negative news from Lucent Technologies and Amazon.com while gearing up to hear what Federal Reserve chairman Alan Greenspan would say about the economy in Senate testimony.
Analysts said there was no compelling reason for investors to start buying technology stocks, as bad news and poor visibility continue to keep cash on the sidelines.
Lucent Technologies Lucent (LU: Research, Estimates) reported a wider-than-expected loss for the latest quarter as revenue also badly missed targets, and the troubled telecom equipment maker said it will cut another 15,000 to 20,000 jobs and take a huge new restructuring charge.
Amazon.com Amazon.com (AMZN: Research, Estimates) reported sales shy of forecasts and warned of more pressure in the coming months as it seeks to meet its deadline of operating profitability in the fourth quarter.
In mid-morning trading on Tuesday, the Nasdaq composite index fell 14.24 to 1,974.32, while the Dow Jones industrial average slid 84.33 to 10,340.09.
In the currency market, the euro was slightly higher against the U.S. dollar, fetching 87.44 U.S. cents compared to 87.20 earlier in the session. 
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