Europe dragged to 3-week lows
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LONDON, England (Reuters) -- Sliding technology and media stocks knocked European blue-chips to three-week lows on Wednesday, amid concern that company profits have reached a plateau.
"We are seeing more analyst downgrades than upgrades," said Mike Lenhoff, chief strategist at Brewin Dolphin Securities. "Loss of earnings momentum in Europe is weighing."
The FTSE Eurotop 300 index of pan-European blue chips ended 0.25 percent down at 978.91 points, its lowest close since 970.77 on January 13. Amid good volumes the number of losers to gainers was about three to two.
The narrower DJ Euro Stoxx 50 index shed 0.75 percent to 2,819.92 points.
Technology stocks slipped 1.7 percent to their lowest since January 7 as traders nervous ahead of a spate of results on Thursday marked them down.
France's Alcatel fell 4.7 percent, despite expectations the communications equipment maker would post a narrower fourth-quarter loss on Thursday and software firm Dassault Sytemes gave up 4.4 percent.
Dassault reports on Thursday and investors are worried about its 2004 outlook. French-American supplier of data analysis software Business Objects which details results late on Thursday tumbled 5.2 percent.
Together with Vivendi Universal and France Telecom they helped depress the Paris bourse 0.84 percent to 3,607.57 points.
Growth stress
France Telecom tumbled 6.0 percent as weakness in its fixed-line business raised concerns about future growth and telecoms to media group Vivendi was 2.1 percent lower as investors fretted about Thursday's fourth-quarter sales data.
Britain's biggest pay-TV firm BSkyB fell 1.9 percent on news its chief financial officer was leaving.
But Reuters hit a 19-month high after ABN AMRO predicted strong profit growth this year at the news and information group. Reuters ended up 3.1 percent.
British mobile phone company mm02 rose 2.1 percent after winning 855,000 new subscribers in the Christmas quarter and medical devices firm Smith & Nephew, which added 2.6 percent ahead of results on Thursday, helped the FTSE up 0.18 percent to 4,398.5.
The Swiss SMI also rose 0.71 percent to 5,775.6 points, boosted by food group Nestle.
Nestle ended 2.0 percent higher as investors gave the thumbs up to a shareholder pact with L'Oreal's founding family. The agreement could pave the way for Nestle to eventually take over the French cosmetics group.
L'Oreal outperformed the market with a 0.80 percent gain.
Over on Wall Street, the blue-chip Dow Jones industrial average was trading 0.14 percent down at 10,490.01 and the technology-heavy Nasdaq Composite Index had lost 1.49 percent to 2,035.46 points.
Euro stress
Strategists said the damage to European company exports and profits from the euro strength has become more obvious. But they think the European stock uptrend is still intact.
"But when the money comes back it will look for value and growth," said Mark Tinker, chief strategist at broker Execution Ltd. "People will be a more selective."
But for now auto makers are a casualty of the weak dollar.
Germany's BMW ceded 1.7 percent after Credit Suisse First Boston cut its 2004 and 2005 earnings per share estimate, citing the weak dollar and lower U.S. car sales.
Domestic peer DaimlerChrysler down nearly two percent in the morning session, ended half a percentage point lower after the firm said it had beaten its 2003 profit target.
German car makers and Bayer pushed the German DAX down 0.72 percent to 4,028.37 points.
Bayer fell 1.8 percent after a rival drug maker filed an application with U.S. regulators for a generic copy of its key antobiotic drug Avelox.
Elsewhere, Sanofi Synthelabo was up nearly one percent after the French drug maker said it saw no reason to up its hostile takeover bid for bigger rival Aventis.
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