European markets end lower

February 19, 2002 Posted: 1745 GMT

LONDON (CNN) -- European bourses closed lower on Tuesday, led by tech and auto stocks, and aggravated by a fall on Wall Street after Monday's market holiday.

London's FTSE 100 slipped 1.2 percent to 5,092.5 and the CAC 40 blue chip index in Paris dropped 2.1 percent to 4,256.36, while Frankfurt's electronically traded Xetra Dax was down 1.8 percent to 4,782.12 in late trading (the German market closes at 1900 GMT).

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The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, fell 1.9 percent, with the IT, insurance and auto sectors leading the declines.

German car maker Volkswagen (VOWG), Europe's biggest, was down 2.4 percent in late trading in Frankfurt after it said 2001 pretax profit jumped 18.6 percent to 4.409 billion ($3.83 billion) from 3.719 billion the previous year. Analysts had forecast 2001 pretax profit of around 4.5 billion.

VW sales rose 6.5 percent for the year to 88.540 billion from 83.127 billion in 2000.

German-American car maker DaimlerChrysler (DCXG) was also lower in late trading, falling 4.6 percent. The company reports its 2001 results on Wednesday, at which time it is expected to provide much-anticipated earnings guidance for 2002.

Invensys (ISYS), Britain's biggest engineering company, was the top loser in London, plunging 11.9 percent after chalking up initial gains following an announcement that it plans to sell it industrial components and systems units to reduce debt by £1.5 billion ($2.1 billion).

An earlier technology sell-off on Wall Street put added pressure on European tech and telecoms stocks.

Nokia, the world's biggest mobile phone operator, dropped 5.3 percent. That also followed a chilly reception to its latest product, a high-speed Internet access phone, at the Cannes, France industry fair.

"The timing is bad as it comers during the Cannes conference, where themes are multimedia messaging (MMS) and next generation phones, but their phone does not have MMS or a colour screen," said Michael Schroder, an analysts at Opstock.

Shares in mobile phone maker Orange and its parent France Telecom fell  as an investment dispute with German affiliate MobilCom appeared to soar investors. Orange (ORA) fell 5.1 percent, while France Telecom (FTE) lost 4.3 percent.

Telecoms giant BT Group (BT) lost 4.8 percent and mobile phone operator mm02 (OOM) dropped 5.3 percent.

Elsewhere in the tech sector, British computer services and software group Logica (LOG) fell 2.5 percent. On Wednesday, it reports half-year profits and while the company is expected to post a 17-percent jump in profits, analysts are concerned about a slowdown in its messaging software business.

Cap Gemini (PCAP), Europe's biggest computer services company, fell 1.3 percent in Paris, while German technology giant Siemens (SIEG) was down 2.2 percent in lates trading in Frankfurt.

Among the companies reporting on Tuesday, Dutch-Belgian financial services group Fortis fell 7.7 percent after it said it expects 2001 net profits to decline by 7 seven percent from the 2.77 billion ($2.41 billion) booked in 2000. The drop in earnings as mainly due to an additional provision of 195 million for restructuring costs.

Deutsche Bank (DBKG) was the top loser in late trading in Frankfurt, falling 5.5 percent after two investment banks downgraded it stocks, and concerns grew over credit and bad debt problems facing the financial sector.

Statoil, the Norwegian state-controlled oil company, slipped about 0.5 percent after saying fourth-quarter profit fell 45 percent as crude prices tumbled. Net income declined to 2.61 billion Norwegian crowns ($290 million) from 4.72 billion a year ago.

Among Europe's smaller markets, Amsterdam's AEX index was down 2.2 percent and Milan's MIB30 index fell 2.1 percent, while the SMI in Zurich was 2.2 percent lower.

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In the U.S. on Tuesday, technology stocks led Wall Street lower due to nervousness surrounding the long-term implications of accounting irregularities at companies that include bellwether IBM (IBM: down $3.44 to $99.45, Research, Estimates).

Wal-Mart Stores (WMT: down $0.42 to $59.61, Research, Estimates) reported fiscal fourth-quarter profit that grew from the same period one year earlier, in line with forecasts on better-than-expected sales. The company also said it expects current quarter and full-year earnings per share to meet or slightly exceed expectations.

The Nasdaq composite index fell 32 points, or 1.8 percent, to 1,773.20, while the Dow Jones industrial average lost 79.64 points, 0.8 percent, to 9,823.4.