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European stocks decline as Philips tumbles; DAX down 0.44%

Published 01/24/2011, 04:57 AM
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Investing.com – European stock markets were broadly lower on Monday, as shares in consumer electronics giant Philips led markets lower, while U.S. futures indexes pointed to a lower open on Wall Street.

During European morning trade, the EURO STOXX 50 dipped 0.25%, France’s CAC 40 shed 0.18%, while Germany's DAX was down 0.44%.

Shares in consumer electronics giant Philips tumbled 6.49% after it reported lower-than-expected fourth quarter earnings, despite seeing an 84% jump in fourth quarter profit. The company said sales for the quarter rose by 1.8% to EUR7.39 billion, but comparable sales declined 4%, mainly due to weak consumer demand in Western Europe. 

Meanwhile, shares in European automakers were broadly lower amid concerns that sales in China would decline should the country do more to cool its rapidly growing economy.

Europe’s largest automaker Volkswagen saw shares tumble 2.69%, shares in rival BMW dropped 2.08%, while French automaker Peugeot saw shares plunge 2.26%.

But shares in German utility provider E.ON climbed 0.94%, following a report that Hong Kong tycoon Li Ka-shing was set to bid GBP3.5 billion pounds for the group’s U.K. business. 

In London, the FTSE 100 slumped 0.12% as shares in the financial sector performed poorly after Sir John Vickers, chairman of the Independent Commission on Banking said in a speech over the weekend that U.K. lenders would have to raise more capital and increase the amount of cash they set aside as reserves.

Shares in Royal Bank of Scotland plunged 3.36%, Lloyds Banking Group saw shares tumbled 3.19%, while shares in global financial service provider Barclays dropped 1.59%.

The outlook for U.S. equity markets, meanwhile, was modestly downbeat ahead of earnings reports from fast-food giant McDonald’s and from the world’s largest credit card issuer American Express.  

The Dow Jones Industrial Average futures pointed to a loss of 0.07%, S&P 500 futures indicated a drop of 0.05%, while the Nasdaq 100 futures pointed to a decline of 0.03%.

Earlier in the day, preliminary data showed that manufacturing activity in the euro zone declined unexpectedly in January, falling to a two-month low.


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