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European stocks broadly lower as financials tumble; DAX up 0.05%

Published 01/25/2011, 05:02 AM
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Investing.com – European stock markets were broadly lower on Tuesday, as shares in the financial sector performed poorly, while U.S. futures indexes pointed to a lower open on Wall Street.

During European morning trade, the EURO STOXX 50 slumped 0.56%, France’s CAC 40 shed 0.15%, while Germany's DAX was up 0.05%.

Shares in the financial sector led losses ahead of closely-watched bond sale by the European Financial Stability Facility later in the day.

Shares in Spain’s largest lender Banco Santander plunged 3.09%, Germany’s biggest bank Deutsche Bank saw shares drop 1.78%, while shares in Europe’s largest banking group Credit Agricole plummeted 3.13%.   

Elsewhere, shares in Europe’s largest chipmaker STMicroelectronics tumbled 3.66% after it posted lower-than-expected fourth quarter earnings. The company said that revenue in the quarter totaled EUR2.83 billion, falling short of analysts’ expectations for revenue of EUR2.87 billion.

However, shares in German industrial giant Siemens jumped 1.47% after the company said that net profits in the first quarter of the 2011 fiscal year jumped by 16% to EUR1.72 billion, while revenue grew by 12% to EUR19.49 billion, exceeding market expectations for revenue of EUR18.93 bullion.

Also Tuesday, Swedish telecom services provider Ericsson saw shares surge 3.44% after it said that fourth quarter profit jump to EUR480 million as net sales for the quarter increased by 8% to EUR6.99 billion.

In London, the FTSE 100 dropped 0.66% after official data showed that the U.K.’s gross domestic product unexpectedly declined in the fourth quarter, contracting by 0.5% and confounding expectations for a 0.5% increase.

Meanwhile, shares in the financial sector extended recent losses amid concerns U.K. lenders would have to raise more capital and increase the amount of cash they set aside as reserves.

Shares in Lloyds Banking Group tumbled 2.54%, Royal Bank of Scotland saw shares drop 1.88%, while shares in Barclays lost 1.45%.

The outlook for U.S. equity markets, meanwhile, was downbeat ahead of earnings reports from wireless service provider Verizon and from the world’s largest health-care products company Johnson & Johnson.  

The Dow Jones Industrial Average futures pointed to a loss of 0.27%, S&P 500 futures indicated a drop of 0.45%, while the Nasdaq 100 futures pointed to a decline of 0.53%.

Later in the day, the U.S. was to produce data on consumer confidence, as well as a report on house prices.

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