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Banking fears as markets slump
LONDON, England (CNN) -- European markets buckled on Monday morning, with the focus on falling banking stocks, after Wall Street sank on Friday amid concerns about corporate profits. London's FTSE 100 fell 1.6 percent to 3,751.0 and Frankfurt's electronically traded Xetra Dax dropped 2.5 percent to 2,648.77, while the CAC 40 blue chip index in Paris dived 2.1 percent to 2,708.18. The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was down 1.9 cent, with the banking, information technology, insurance and tobacco sub-sectors falling more than 2 percent each. Tobacco stocks slid after a Los Angeles jury on Friday ordered U.S. cigarette giant Philips Morris (MO) to pay a record $28 billion in damages to a lung cancer sufferer. (Full story) British American Tobacco (BATS) dipped 4 percent to 642.5 pence, Gallaher (GLH) declined 1.5 percent to 606 pence, and Imperial Tobacco (IMT) dropped 2.9 percent to 971 pence. Banking stocks stumbled, led by Germany's Commerzbank (FCBK) after the Financial Times said the bank could cut hundreds of jobs in its corporate banking business. The bank denied weekend reports that it was facing financial problems. Commerzbank slid 9.2 percent to 5.50 euros. Barclays (BARC), LloydsTSB (LLOY), HBOS (HBOS) each fell more than 3 percent in London. BNP Paribas (PBNP) and Societe Generale (PGLE) were both down more than 2 percent in Paris. There was one bright spark in the banking sector. Abbey National (ANL) rose 5.2 percent to 531 pence in London after the Bank of Ireland said it made an informal merger approach to Britain's second-largest mortgage lender. Among the closely watched technology sector, Finland's Nokia (NOK) fell 2.7 percent to 13.13 euros and rival Alcatel (PCGE) dipped 2.9 percent to 2.38 euros. Cap Gemini (PCAP), Europe's biggest computer services company, fell 4.6 percent to 13.33 euros and the region's biggest software company SAP (FSAP) declined 3.3 percent to 40.58 euros. The AEX index in Amsterdam fell 2.3 percent and Milan's MIB30 index lost 1.5 percent, while the SMI in Zurich declined 2.3 percent. In the U.S. on Friday, stocks wrapped up their sixth consecutive losing week with a negative session that saw investor confidence hit by the latest round of corporate profit warnings. The Dow Jones industrial average sank 2.5 percent, or 188.79 points, to 7,528.40, bringing the world's most widely watched stock index to its lowest close since mid-November 1997, during the Asian financial crisis. The Nasdaq Composite lost 25.66 points, or 2.2 percent, to 1139.90, hitting another six-year low, while the Standard & Poor's 500 index fell 18.37 points, or 2.2 percent, to 800.58. For the week, the Dow lost 2.2 percent, the Nasdaq fell 4.9 percent and the S&P dropped 3.2 percent. Wall Street was expected to open lower later on Monday. S&P 500 index futures fell 7.8 points to 798.0 on the Globex trading system, while fair value, a measure that takes account of interest costs and dividend payments, was calculated at 802.68.
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