|
Europe tumbles on techs
|
 |
August 28, 2001: 12:17 p.m. ET
U.S. pessimism, European money supply data drag bourses
|
LONDON (CNN) - Europe's main markets closed in the red on Tuesday following a sharp drop in consumer confidence in the United States.
U.S. stocks fell in early trade on Wall Street after a report showed that American consumer sentiment took a surprise tumble this month, a sign that lower interest rates, tax rebates, and declining energy prices are not enough to ease worries about the U.S. economy.
European markets had earlier been unsettled after data on euro zone money supply stoked speculation the ECB may delay cutting rates.
The annual rate of growth in the M3 measure of money supply accelerated to a faster-than-expected 6.4 percent in July.
The European Central Bank has said it would not trim interest rates for the 12-nation euro zone unless it has money supply under control and inflation below its 2 percent target.
"This is a problem of their own making," Steve Barrow, an economist at Bear Stearns, told CNN, pinpointing the problem as "having two targets for money supply, which is heading higher, and inflation, which is on the way down. The ECB has to decide on one target."
London's FTSE 100 closed 0.7 percent lower at 5,432.5 and Frankfurt's electronically traded Xetra Dax fell 1.8 percent to 5,308.16, while the CAC 40 blue chip index in Paris slumped more than 2 percent to 4,806.57.
Across Europe, the information technology (IT) sector suffered the biggest losses.
In London, software company CMG (CMG) ended 11.6 percent lower. Analysts at investment bank JP Morgan issued a "trading sell" recommendation on the stock ahead of the company's half-year financial report on Wednesday.
Among CMG's rivals, Logica (LOG) lost 5.8 percent and Misys (MSY) lost 3.5 percent.
Anglo-U.S. fund group Amvescap (AVZ) fell 6.1 percent, while business data services company Energis (EGS) was off 4.9 percent.
In Frankfurt, The continent's second-largest chipmaker, Infineon Technologies, (FIFX), led the decliners, losing 4.3 percent, while Europe's largest electronic components maker, Epcos, (FEPC), lost 4.4 percent.
Deutsche Telekom (FDTE), Europe's biggest phone company, dropped 3.3 percent. The company's stock see-sawed as investors digested its plans to achieve double-digit average annual growth in sales and core operating earnings until 2004. Telekom CEO Ron Sommer said he is in talks with investors that hold up to 170 million shares about whether and when they will sell their stock.
German drug and chemicals maker Bayer (FBAY) rose almost 1.7 percent to lead the gainers, after Reuters said Swiss drug company Roche Holding has offered $20 billion to buy the German firm's drug business. Bayer's board is expected to discuss the offer on September 13, the report went on to say. Roche fell 1.6 percent in Zurich.
In Paris, The continent's No.4 telecom equipment maker, Alcatel (PCGE) led the losers, falling 5.2 percent, while consumer electronics firm Thomson Multimedia (PTMM) was off 4.9 percent.
Defense and electronics group Thales (PHO) dipped 3.9 percent.
Europe's biggest media company Vivendi Universal (PEX) lost early gains to close 1.1 percent lower, after the company said the British private equity group Cinven was close to buying its trade publications business for  2 billion ($1.8 billion).
Lagardere (PMMB), a French conglomerate with interests from missiles to magazines, dropped nearly 3 percent.
The world's largest mobile phone maker, Finland's Nokia, fell 3.8 percent.
Sweden's Ericsson, the No.1 supplier of high-speed cellular network equipment, lost 3.5 percent.
In Amsterdam, the AEX index slipped 1.6 percent along with the SMI in Zurich. Milan's MIB30 index was down 1.2 percent.
The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, fell 1.1 percent, with tech companies comprising the biggest losers.
In the United States, the Conference Board, a private research group, said its sentiment gauge fell to 114.3 this month from a revised 116.3 in July. Economists had been expecting a gain.
The figures followed new signs that corporate profits face continued pressure as businesses pull back on spending. Sun Microsystems fell after Goldman Sachs cut its quarterly and full-year earnings forecasts for the server and workstation maker.
And office furniture maker Herman Miller became the latest U.S. company to say that financial results could fall short.
In mid-morning trading, the Nasdaq composite index dipped 16.23 points to 1,896.19 while the Dow Jones industrial average shed 67.81 to 10.313.19. 
|
|
|
|
|
 |
|
