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Insurers sink European markets
LONDON, England (CNN) -- European markets sank on Tuesday, led by the insurance sector, as investors on both sides of the Atlantic headed to the sidelines to await the details of a $670 billion U.S. economic stimulus package. London's FTSE 100 fell 1.1 percent to 3,957.4 and the CAC 40 blue chip index in Paris lost 1.5 percent to 3,160.99, while Frankfurt's electronically traded Xetra Dax was down 1.9 percent to 3,098.51 in late trading (the German market was set to close at 1700 GMT). The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, slipped 0.8 percent. Insurers led the declines as investors continued to fret over the impact of the markets volatility on the sector's large equity holdings. The UK's Prudential (PRU) fell 3.9 percent to 431 pence and Aviva (AV) lost 2.7 percent to 448 pence, while France's Axa (PCS) dropped 4.8 percent to 13.49 euros and Germany's Allianz (FALZ) was down 3.5 percent to 95.35 euros in late Frankfurt trading. In the auto sector, France's Peugeot (FPUG) was up 0.7 percent to 40.65 euros after saying it was bullish about growth prospects for this year and posted a rise in 2002 sales, even as European car sales declined by 3 percent. But Germany's Volkswagen (FVOW) was down 3.1 percent to 37.29 euros in late Frankfurt trading. It sold 1.9 percent fewer cars last year but it hopes to sell more than 5 million units with the launch of new models. (Full story) DaimlerChrysler (FDCX) was down 0.4 percent to 31.35 euros and BMW (FBMW) was down 1.3 percent to 30.10 euros in late trading. Italy's Fiat was down 3.2 percent to 8.97 euros, ending a string a gains that followed signs of a possible rescue plan for the struggling car maker. Oil stocks declined in line with weaker crude prices after the Organization of Petroleum Exporting Countries said it might boost production by 8 percent to fill a gap caused by a five-week strike in Venezuela. (Full story) Brent crude for February delivery -- the benchmark oil futures contract on the International Petroleum Exchange in London -- was down 80 cents to $29.40 in late trading on Tuesday. TotalFinaElf (PFP) was down 2.5 percent to 137.90 euros in Paris, while BP(BP) lost 1.2 percent to 425.14 pence and Shell Transport & Shipping (SHEL) fell 1.5 percent to 418.63 pence. German retailers were under pressure after the release of data showing sales fell 6.0 percent year-on-year in real terms in November, below analysts' expectations of a 0.4 percent rise. (Full story) But Dutch retailer Ahold rose 2.8 percent to 13.47 euros in Amsterdam after posting full-year sales of 72.7 billion euros, up 9.2 percent from 2001, and reaffirming its forecast for a decline of six to eight percent in earnings per share in 2002. (Full story) The AEX index in Amsterdam slipped 0.4 percent, Milan's MIB30 index lost 1.4 percent and the SMI in Zurich dipped 0.6 percent. Many investors were looking for direction from the $600 billion economic stimulus package to be announced later on Tuesday by U.S. President George W. Bush. "There is some anticipation ahead of Bush's speech as his planned tax cuts should help the U.S. consumer, but much of the package has already been leaked," Andrea Williams, head of European equities at Royal London Asset Management, told Reuters. In the U.S. on Tuesday, markets were similarly consumed by the Bush's economic stimulus plan, with stocks drifting lower in mid-morning trade as investors limited their activity before the announcement. (Full report) At 1600 GMT, the Dow Jones industrial average was down 50.66 points to 8722.91, while the Nasdaq composite slipped 3.25 points to 1418.07 and the S&P 500 index lost 8.31 points to 920.70.
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