Member access

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

European Stocks Drop on Euro-Zone Economic Data, Worry Over Fed

02/21/2013 | 01:54pm US/Eastern

By Sara Sjolin and Andrea Tryphonides

European stocks slumped, hurt by downbeat euro-zone economic data and worries that the Federal Reserve could reduce its stimulus measures.

Italian shares were particularly battered as jitters about weekend elections added to investors' worries about the economic health of the 17-nation euro bloc. The euro dropped to its lowest level against the dollar in six weeks.

The benchmark Stoxx Europe 600 index dropped 1.5% to 284.86, its lowest close in two weeks, with banks and miners posting some of the biggest losses.

European stocks on Thursday followed losses in the U.S. made Wednesday after the latest Federal Open Market Committee minutes showed officials were worried that the U.S. central bank's easy-money policies could lead to instability in financial markets and may be difficult to pull back in the future.

Several members said the central bank should prepare to vary the pace of its asset purchases depending on the economic outlook.

That was followed by disappointing preliminary readings of purchasing managers' indexes from euro-zone economies early Thursday. The preliminary composite PMI for the euro zone slumped to a two-month low of 47.3 in February, indicating the region's downturn steepened. Economists surveyed by Dow Jones Newswires had forecast a February reading of 48.5.

The manufacturing PMI for Germany rose to 50.1, a 12-month high, while the same reading for France climbed to 43.6, a 2-month high, but fell short of expectations. A reading above 50 indicates expansion.

The data hit the euro and oil prices, and pushed money into safe-haven assets like German government bonds.

"We have quite a few triggers for nervousness coming through today. You had a rise in the markets for a while and people were becoming more and more nervous and looking for the first crack, " said Justin Urquhart Stewart, co-founder of Seven Investment Management.

"Nothing fundamentally has changed. On the longer term, the economy is still healing, but markets were getting ahead of themselves and waiting for economic data to back it up. We had a wave of everyone thinking the glass was half full, but now that perception has changed," he said.

Credit Suisse analysts noted that the setback in the composite PMI came after three consecutive rises. "But, the weakness in the services sector is a reminder of the weak domestic demand in the euro area, and more in general, of how fragile the (modest) recovery is likely to be," it added.

The U.K.'s FTSE 100, which had hit its highest close since 2008 earlier in the week, dropped 1.6% to 6291.54. Germany's DAX fell 1.9% to 7583.57 and France's CAC-40 slid 2.3% to 3624.80.

Italy's FTSE Mib slid 3.1% to 16.009.55 investors as worried that a new government could end the country's current reformist drive. Banks bore the brunt of the selloff; UniCredit dropped 4.3% and Intesa Sanpaolo declined 4.1%.

Banks also fell elsewhere in Europe. Societe Generale lost 4.5% in Paris, and HSBC Holdings fell 2.3% in London.

Miners, which are sensitive to economic swings, also declined. BHP Billiton shaved off 4%,

AXA fell 3.1% on a drop in full-year net profit. The insurer said it would implement additional cost-cutting measures.

Swiss Re rose 2.5% after the reinsurance company reported a 62% increase in full-year net income and said it was well positioned in 2013 despite the challenging outlook in developed economies.

BAE Systems led gains in the FTSE 100, climbing 4.1%, after the company announced a share buyback program and said growth in new markets should offset the impact of shrinking military spending in the U.S. and Europe.

The euro fell to $1.3206, from $1.3283 late Wednesday in New York, after dropping to $1.3168 during the European session.

By the close of European equity markets, light, sweet crude for April delivery was 2.3% lower at $93.00 a barrel on the New York Mercantile Exchange.

React to this article
Latest news
Date Title
10:01p CHC : SHAREHOLDER ALERT BY FORMER LOUISIANA ATTORNEY GENERAL: Kahn Swick & Foti, LLC Reminds Investors with Losses in Excess of $100,000 of Lead Plaintiff Deadline in Class Action Lawsuit Against CHC Group Ltd. - HELI
10:01p MOBILEIRON SHAREHOLDER ALERT BY FORMER LOUISIANA ATTORNEY GENERAL : Kahn Swick & Foti, LLC Reminds Investors With Losses in Excess of $100,000 of Lead Plaintiff Deadline in Class Action Lawsuit Against MobileIron, Inc. -- MOBL
10:00p FORCEFIELD SHAREHOLDER ALERT BY FORMER LOUISIANA ATTORNEY GENERAL : Kahn Swick & Foti, LLC Reminds Investors With Losses in Excess of $100,000 of Lead Plaintiff Deadline in Class Action Lawsuit Against ForceField Energy Inc. - FNRG
09:53p PUBLIX SUPER MARKETS : employees use online petition to push back against anti-beard policy
09:50p MAZDA MOTOR : BRIEF: Vallejo man killed in motorcycle crash on I-80 near Crockett
09:50p FBR : Tax collection: NBP, FBR offices open today
09:35p COSTCO WHOLESALE : Gas leak forces Costco evacuation
09:30p GALLIFORD TRY : Wick project beats international competition to Gold Award
09:26p OMINECA MINING : and Metals and Sierra Madre Developments Announce Amendment of Option Agreement for the Abo (Harrison Gold) Property
09:20p OCC OFFICE OF COMPTROLLER OF CURRENCY : Federal Bank Regulatory Agencies Seek Further Comment on Interagency Effort to Reduce Regulatory Burden
Latest news
Advertisement
Hot News 
HERON THERAPEUTICS : DE/ : Entry into a Material Definitive Agreement, Financial Statements and Exhibits (form 8-K)
IMMUNODIAGNOSTIC SYSTEMS HLDGS : Expects Further Revenue Fall In Current Year
LONDON MIDDAY BRIEFING : TeleCity's Deal Agreed But Synergy's Stalls
MINCO : 2015 Q1 MD&A Report
UBISENSE : Result of General Meeting
Most Read News
07:48p NATURALLY SPLENDID ENTERPRISES LTD : Naturally Splendid Launches Bulk Ingredient Division
07:15p SOLARCITY : eager to tap local supplier base
07:43p NATURALLY SPLENDID ENTERPRISES : Launches Bulk Ingredient Division
07:15p SONY : 'Aloha' might be a mess of a romantic comedy, but it has its moments
06:43p EXCLUSIVE : Stifel in lead to buy Barclays' U.S. wealth unit - sources
Most recommended articles
08:33p Strong sales could shift Ford, GM to higher gear
07:08p Merkel appeals to Germans to back trade pact ahead of G7 meeting
06:46p Canadian miner TMAC Resources plans IPO on TSX
06:45p Japanese Yen Stumbles, but is a USDJPY Rally Above ¥124 Justified?
06:43p EXCLUSIVE : Stifel in lead to buy Barclays' U.S. wealth unit - sources