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Europe splashed in red ink
LONDON, England (CNN) -- European markets fell sharply, extending losses into a sixth day, on Wednesday, amid concerns about earnings and war with Iraq. London's FTSE 100 slipped 0.9 percent to 3,701.7 and Frankfurt's electronically traded Xetra Dax dipped 2 percent to 2,811.41, while the CAC 40 blue chip index in Paris fell 1.8 percent to 2,938.14. The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was down 1.4 percent, with insurance, information technology and computer services sub-sectors leading the losses. Russian military sources told Reuters that the United States planned to launch an attack against Iraq from mid-February. "Iraq is the main worry. We've broken important technical support levels in the last couple of days as the market worries about growing geopolitical tensions," Thierry Lacraz, European market strategist at Pictet & Cie in Geneva, told Reuters. European stocks also came under pressure from a host of disappointing earnings reports and forward-looking statements for the rest of the year. Italian insurer Generali fell 3.3 percent to 17.82 euros after saying it expected to post a net loss in 2002. Its also announced 2,800 jobs cuts. (Full story) Other insurers also dropped. Germany's Munich Re (FMUV2) fell 5.1 percent to 100.83 euros, France's Axa (PCS) dropped 3.9 percent to 11.60 euros and Britain's Prudential (PRU) fell 3.6 percent to 364.5 pence. Europe's biggest travel operator TUI slumped 7.6 percent to 13.80 euros after it said 2002 earnings and sales had fallen adding it was impossible to forecast trends this year because of the poor economy and possible war with Iraq. (Full story) Nokia (NOK), the world's biggest mobile phone maker, fell 2.1 percent to 13.78 euros after U.S. rival Motorola posted a mixed outlook. (Full story) Swedish rival Ericsson (ERKY) dropped 2.7 percent to 7.30 Swedish crowns. Swedish daily Dagens Industri said the company was planning to inject between one and two billion crowns ($115 million-230 million) in fresh capital into its mobile phone joint venture with Japan's Sony. Mobile phone operators were having a mixed session after British telecom regulator Oftel imposed stiff price cuts on calls to mobile phones. Mmo2 (OOM), the UK's fourth-largest operator, rose 5.2 percent after saying it would accelerate cost cuts and delay the launch of high-speed mobile-phone services to mitigate the financial impact. (Full Story) "The regulatory changes will squeeze margins, there's no doubt about that,'' Anais Faraj, global strategist at Nomura, told Reuters. "But a sense of normality has returned to the telecoms sector -- investors are no longer worried about asset deflation and are trying to pick the winners.'' The AEX index in Amsterdam fell 1.6 percent and Milan's MIB30 index dipped 0.9 percent, while the SMI in Zurich slipped 1.8 percent. In the U.S. on Tuesday, global political worries punished stocks, overshadowing positive earnings reports. The Dow Jones industrial average fell 1.7 percent, or 143.50 points, to 8442.90, the S&P 500 index lost 1.6 percent, or 14.16 points, to 887.62, while the Nasdaq composite dipped 11.95 points to 1364.25. Wall Street was expected to open lower later on Wednesday. S&P 500 index futures fell 2.9 points to 885.6 on the Globex trading system, while fair value, a measure that takes account of interest costs and dividend payments, was calculated at 888.82.
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