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Europe trips as Wall St. stumbles

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LONDON, England (CNN) -- European markets ended lower on Friday, led by insurance and bank stocks, after Wall Street stumbled in early trading as positive U.S. employment numbers took a back seat to more corporate profit warnings.

London's FTSE 100 ended 2.1 percent lower at 3,799.1 and the CAC 40 blue chip index in Paris lost 3.3 percent to 2,765.9, while Frankfurt's electronically traded Xetra Dax was down 3.6 percent to 2,712.18 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 2.1 percent. The insurance, banking, information technology and pharmaceuticals sub-sectors were among the main decliners.

The decline in European markets accelerated after Wall Street recoiled from another round of profit warnings from high-profile names in the tech and drug sector, after U.S. stocks picked up briefly following better-than-anticipated jobless numbers.

Insurers, which have taken the brunt of recent market volatility due to their heavy investments in equities, led the sell-off in Europe again on Friday.

Germany's Allianz (FALZ), Europe's biggest insurer, was down 8.1 percent to 79.42 euros in late Frankfurt trading, while No. 2 Axa (PCS) fell 7.9 percent to 10.02 euros in Paris and the UK's Royal & Sun Alliance (RSA) dropped 8.7 percent to 97.82 pence.

Munich Re (FMUV2), the world's largest reinsurer, was down 8.3 percent to 101.89 euros in late Frankfurt trading, while Swiss Re slid 6.1 percent to 78.20 Swiss francs.

Leading the financial sector lower were Deutsche Bank (FDBK), which was down 7.1 percent to 41.79 euros and Commerzbank (FCBK), which lost 6.9 percent to 5.96 euros in late Frankfurt trading. The UK's Prudential (PRU) fell 6.5 percent to 340.50 pence, Abbey National (ANL) lost 6.4 percent to 514.09 pence and Barclays (BARC) slid 4.8 percent to 386 pence.

Companies with exposure to the Brazilian economy were having a mixed session with analysts worried about the possibility of an inexperienced left-wing president being elected to manage the world's 12th largest economy.

Spain's two biggest banks -- Banco Bilbao Vizcaya Argentina and Santander Central Hispano -- and Dutch bank ABN Amro were all lower on Friday.

Drug stocks stumbled after U.S. drugmaker Schering-Plough (SGP) warned that 2003 and 2004 would be well below forecast and the results this year would fall short of expectations as a key patent expired. (Full story)

GlaxoSmithKline (GSK), Europe's biggest drug company, fell 2.5 percent to 1,304 pence in London and France's Aventis (PAVE) dipped 2.4 percent to 56.15 euros in Paris.

Bayer (FBAY), the German chemicals and pharmaceuticals company, was down 2.1 percent to 18.77 euros in late Frankfurt trading. On Friday, it said it expected higher 2002 net income despite volatile and risky markets. It also sold its chemicals additives business Rhein Chemie to U.S. private equity house for 215 million euros ($213 million) including debt. (Full story)

And battered technology stocks slid on a profit warning from U.S. data storage company EMC (EMC). It said it would cut 1,350 jobs as it posted a quarterly loss and worse-than-expected revenue numbers.

STMicroelectronics (PSTM), Europe's biggest chipmaker, fell 5 percent to 12.82 euros and German chipmaker Infineon Technologies (FIFX) was down 3.2 percent to 5.71 euros in late Frankfurt trading.

Consumer electronics giant Philips Electrics was down 1.6 percent to 15.05 euros and chip equipment maker ASML lost 8.6 percent to 6.17 euros.

French telecoms equipment maker Alcatel (PCGE) dropped 5.4 percent to 2.45 euros after Chief Executive Serge Tchuruk said weakening demand was still clouding the company's financial outlook. (Full story)

The AEX index in Amsterdam fell 2.6 percent, the SMI in Zurich declined 2.3 percent and Milan's MIB30 lost 2.9 percent.

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