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Europe slumps on corporate woes
LONDON, England (CNN) -- European markets turned lower at midday on Wednesday as investors began to sour on disappointing results from Intel, the world's No. 1 chipmaker, and indications of a weak opening on Wall Street. The renewed pessimism in the markets comes after a string of rallies on both sides of the Atlantic, prompted by earlier signs of improving corporate earnings. London's FTSE 100 was down 1.8 percent to 4,054.8, while Frankfurt's electronically traded Xetra Dax lost 1.4 percent to 3,006.66 and the CAC 40 blue chip index in Paris slipped 0.9 percent to 3,064.74. The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was down 1.6 percent. The information technology, computer, telecoms and electronics sub-sectors led the declines. Intel Corp. (INTC) said after the end of trading on Tuesday that its third-quarter profit rose from the same period last year but still fell short of expectations, on sales that were flat compared with a year earlier. (Full story) Those weak results put early pressure on European chipmakers. France's STMicroelectronics (PSTM), Europe's largest semiconductor manufacturer, fell 6.2 percent to 15.64 euros. Also on Wednesday, the company denied a newspaper report that it was in merger talks with U.S. rival Motorola. (Full story) Germany's Infineon Technologies (FIFX), the region's No. 2 chipmaker, lost 8.8 percent to 6.81 euros after strong gains on Tuesday following news that it had set up an alliance with Agere Systems of the U.S. to develop chips for new high-speed wireless networking systems. (Full story) ASML, the Dutch semiconductor equipment maker, dropped 10.4 percent to 7.39 euros. Mobile phone giant Vodafone (VOD) was down 4 percent to 97 pence after it said it had agreed with BT Group and SBC Communications to buy their stakes in France's Cegetel in a 6.3 billion euro ($6.2 billion) cash deal. However, to gain control of the group it also needs approval from Vivendi Universal to buy the French media giant's 44-percent stake in Cegetel. (Full story) Shares in BT (BT) were down 3.6 percent to 173.62 pence, while Vivendi (PEX) gained 6.6 percent to 14.30 euros. Meanwhile, other telecom-related stocks fell after Motorola (MOT), the world's second-largest mobile phone maker, said late on Tuesday that sales were weaker than expected in the last quarter -- although the U.S. group posted a net profit, ending six straight quarters of net losses. (Full story) Nokia, the world's biggest mobile phone maker, fell 5.3 percent to 14.96 euros, while Swedish rival Ericsson lost 1.1 percent to 4.77 crowns. Shares in UK broadcasters Granada and Carlton Communications were mixed after they agreed on Wednesday to merge their operations, a move that would create the country's largest commercial television operator. (Full story) Granada (GAA) was up 0.7 percent to 75.50 pence, while Carlton (CCM) slipped 0.2 percent to 129.25 pence. Global financial information provider Reuters Group slumped to 12-year lows after it reported weaker-than-expected revenues for the third quarter and painted a worsening outlook. Its shares were down 20.9 percent to 164.9 pence at midday in London. (Full story) The AEX index in Amsterdam was down 2.2 percent, Milan's MIB30 index lost 1.7 percent and the SMI in Zurich slipped 2.1 percent. In the U.S. on Tuesday, stocks rallied to a rare fourth straight winning session after strong results from General Motors and Motorola. The Dow Jones industrial average jumped 4.8 percent to 8,255.68, while the Nasdaq composite rose 5.1 percent to 1,282.44 and the Standard & Poor's 500 index gained 4.7 percent to 881.27. Wall Street was expected to open lower later on Wednesday. S&P 500 index futures fell 10.1 points to 872.60 on the Globex trading system, while fair value, a measure that takes account of interest costs and dividend payments, was calculated at 883.52.
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