Print

Mail

wiki links

European stocks decline for second consecutive week

European stocks fell for a second straight week, led by technology and financial companies, as Intel Corp cut its profitability forecast and Warren Buffett said the "party is over" for insurers.

STMicroelectronics NV, Europe's largest semiconductor maker, had its biggest weekly drop since December 2002 as Intel said flash-memory prices will fall about twice as fast this quarter as predicted. Allianz SE and Axa SA slumped after billionaire investor Buffett said profit margins for insurers will drop "significantly." UBS AG sank on speculation that Europe's largest bank will announce further writedowns.

The Dow Jones STOXX 600 Index dropped 3.4 percent to 307.98, the biggest weekly retreat in a month. The regional gauge has declined 16 percent this year on concern that the collapse of US subprime mortgages and a slowdown in the world's largest economy will curb profit growth in Europe.

"The earnings outlook is clouded for a lot of companies," said Job Curtis, who helps manage about US$2.2 billion at Henderson Global Investors in London. "The jury is still out on the US economy."

Analysts have cut their profit growth estimates for this year for companies in the STOXX 600 to 3.3 percent from 11 percent at the end of last year, estimates compiled by Bloomberg show.

Banks and securities firms globally have posted losses exceeding US$188 billion since the start of last year as the impact of defaults on subprime mortgages rippled through financial markets.

The US government on Friday reported an unexpected loss of 63,000 jobs last month, defying economists' forecasts for a gain of 23,000.

Germany's DAX declined 3.5 percent for the week, while France's CAC 40 lost 3.6 percent and the UK's FTSE 100 fell 3.1 percent.

The STOXX 50 retreated 4.1 percent, while the Euro STOXX 50, a measure for the euro region, sank 4 percent.
This story has been viewed 1650 times.