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Europe reverses earlier losses
LONDON, England (CNN) -- European stocks reversed earlier losses in mid-afternoon trading on Tuesday, after hitting six-year lows, as Wall Street futures pointed to a stronger opening. London's FTSE 100 rose 0.9 percent to 3,467.9 after sliding to fresh seven-and-half-year lows in early trading. Frankfurt's electronically traded Xetra Dax, which dived to levels not seen since January 1996 on Monday, inched up 0.1 percent to 2,332.4, while the CAC 40 blue chip index in Paris rose by a third to 2,521.81. The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was up 0.7 percent to 709.66 points, after dipping to a low of 696.45, its weakest level since a closing low of 695.50 on December 18, 1996. But stocks were buoyed with the hope Wall Street would come off five-month lows later on Tuesday. S&P 500 index futures inched up 3.7 points to 811.5 on the Globex trading system, while fair value, a measure that takes account of interest costs and dividend payments, was calculated at 807.17. Earlier markets were knocked off their feet as Nokia and Volkswagen issued gloomy trading statements. Nokia (NOK), the world's biggest mobile phone maker, fell 2 percent to 11.22 after warning sales and earnings would be weaker than expected as corporate and consumers delayed spending on new products. (Full story) And Volkswagen (VOW), Europe's biggest car maker, slid 5.8 percent to 30.70 euros. The company warned 2002 operating profit would fall short of last year as demand weakens and the euro strengthens against the dollar. (Full story) Deutsche Telekom (FDTE), Europe's biggest phone company, rose 5.1 percent to 9.62 euros, EADS (PEAD) -- the parent of Airbus -- gained 7.5 percent to 6.99 euros and insurer Royal & Sun Alliance (RSA) climbed 6 percent to 62 pence. Declining and advancing issues were roughly matched, but volume was only moderate, according to Reuters. "It's a total lack of buyers. There is nobody there on the other side to buy as they have lost confidence,'' Andrea Williams, head of European equities at Royal London Asset Management, told Reuters. Hope that stocks would bounce once the Iraq crisis is resolved was fading because economic data were not improving, she said, adding that still high crude oil prices and strengthened euro -- already hitting carmaker Volkswagen on Tuesday -- would also hit profits. "European company earnings estimates are way too high as you now have the currency against them and the oil price may not be significantly lower in the second half,'' Williams said. Iraq continued to take center stage as the United Sates and Britain failed to drum up support for a second United Nations resolution. (Full story) "We are caught in a vicious cycle of selling that only resolution on Iraq can break," Gert de Mesure, head of equity strategy at Delta Lloyd Securities in Antwerp, told Reuters. Anglo-Dutch steel group Corus (CS-) dived more than 50 percent to 6.68 pence in London after its Dutch supervisory board rejected the sale of its aluminium unit, but the company's management vowed to fight the decision in court. (Full story) The AEX index in Amsterdam rose 0.9 percent and Milan's MIB30 index also added 0.9 percent, while the SMI in Zurich gained 0.7 percent. In the U.S. on Monday, the Dow industrials and the Standard & Poor's 500 index hit new five-month lows amid fears of war and weakness in the U.S. economy. The Dow Jones industrial average fell 2.2 percent, or 171.85 points, to 7568.18, the Nasdaq composite dipped 2 percent, or 26.92 points, to 1278.37, and the S&P 500 index lost 2.6 percent, or 21.41 points, to 807.48. Monday's was the Dow's worst finish since October 10 when it closed at 7,533.95. The S&P 500 Monday also closed just above its October 10 low, which was 803.92
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