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European markets stumble lower


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LONDON, England (CNN) -- European markets ended lower on Thursday, wiping out big gains from the previous session, as Wall Street wobbled in early trading after an upbeat economic report and a positive forecast from DuPont failed to inspire war-weary investors.

London's FTSE 100 slipped 0.6 percent to 3,880.3 and the CAC 40 blue chip index in Paris fell 2.7 percent to 2,861.04. In Frankfurt, where markets are open despite a public holiday, the electronically traded Xetra Dax was down 2.5 percent to 2,852.53 in late trading (the German market was set to close at 1800 GMT).

The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was down 1.3 percent, with the retail and automobile sub-sectors leading declines.

Markets picked up -- at least temporarily -- after U.S. data showed the service sector grew in September at its fastest pace since July, casting doubt on brewing concerns that the economic recovery may be stalling. (Full story)

Another bright spot was chemical giant DuPont (DD), which said it would top the most optimistic Wall Street forecasts for the third quarter earnings, citing lower-than-expected taxes for most of the improvement. (Full story)

"The concern is all about growth, so anything that shows that concern is slightly misplaced is going to have a positive reaction in the equity market," Matthew Wickens, global economist at ABN Amro, told Reuters.

The U.S. data helped relieve some of the concerns prompted by U.S. chip maker Advanced Micro Devices (AMD), which said on Wednesday that it missed its third-quarter revenue target by a wide margin, logging sales of roughly $500 million during the period. (Full story)

The European chip sector, in the midst of its worst downturn ever, declined after the AMD warning.

ARM Holdings (ARM), Europe's biggest chip designer, plunged 12.3 percent to 40.04 pence -- extending the previous session's 60 percent loss after it issued its own warning on Wednesday that third-quarter profits will only amount to a half of what analysts were expecting.

STMicroelectronics (PSTM), Europe's biggest chipmaker, declined 4.2 percent to 13.50 euros, while No. 2 Infineon Technologies (FIFX) was down 4 percent to 6 euros in late Frankfurt trading and Philips Electronics, Europe's third-largest chip maker, lost 3.4 percent to 15.31 euros.

ASML, one of the world's biggest suppliers of equipment to make chips, dipped 0.2 percent to 6.75 euros in Amsterdam.

France Telecom (PFTE) lost 1.8 percent to 8.28 euros. On Wednesday, it named corporate trouble-shooter Thierry Breton as the new chairman and chief executive of struggling phone company. Deutsche Telekom (FDTE) was down 1.6 percent to 9.33 euros in late trading, ahead of naming its news chief executive at the end of the month, after Ron Sommer was dropped from the position last month.

Fortis, the Dutch-Belgian financial services group, was down 0.4 percent to 15.26 euros after it moved to reassure investors its financial position was sound as it wrote off more than two billion euros to reflect the falling value of its equity holdings. (Full story)

Air France (PAF), fell 8 percent to 7.12 euros after being hit by a 24-hour strike called by trade unions over state plans to push the majority of the airline's capital into private hands. The airline said 20 flights, mostly on internal routes, had been cancelled. The strike comes as tens of thousands of French workers protested against other government plans for privatisation. (Full story)

Loss-making carmaker Fiat lost 0.4 percent to 90.90 euros after saying its sales in Italy slumped for the ninth straight month to record lows in September while car sales for all manufacturers rose. (Full story)

Meanwhile, Vodafone (VOD), Europe's biggest mobile phone operator, rose 3.3 percent to 93.44 pence after chief executive Chris Gent said late on Wednesday the group would consider a share buy-back if it was unable to raise its stake in French telecom company Cegetel.

The AEX index in Amsterdam fell 1.1 percent and the SMI in Zurich declined 1.2 percent, while Milan's MIB30 index was off 0.1 percent.

In the U.S. on Thursday, a much better economic report, combined with an upbeat forecast from DuPont, ignited a blue-chip rally Thursday morning, but multiple bearish forecasts limited the gains for tech stocks.

At 1415 GMT, the Dow Jones industrial average was up 120.06 points to 7875.67, while the Nasdaq composite rose 3.45 points to 1190.75 and the Standard & Poor's 500 index was basically flat. (Full report)



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