Euro stocks drop on U.S. debt woes, earnings; DAX falls 1.1%
Investing.com
Published Jul 28, 2011 05:18AM ET
During European morning trade, the EURO STOXX 50 fell 0.75%, France’s CAC 40 slumped 0.9%, while Germany’s DAX 30 sank 1.1%.
With the August 2 deadline just days away, U.S. Republican and Democratic leaders struggled to come up with a compromise that would allow them to raise the USD14.3 trillion debt ceiling.
Meanwhile, Standard & Poor’s cut Greece’s credit rating by one notch to CC, two steps above default, saying the country will partially default on its debt.
In earnings news, shares of Swiss lender Credit Suisse dropped 2.5% after it said second quarter profit fell 52%, citing poor trading results and a strong Swiss franc. The lender said that it would cut nearly 4% of its workforce to offset the weakness.
Shares in French telecom-gear manufacturer Alcatel-Lucent tumbled 8.5% after it reported second quarter operating profit of EUR108 million, missing expectations for profit of EUR138.4 million.
Europe’s second largest airliner Deutsche Lufthansa saw shares retreat 3.1% after it reported lower-than-expected first half earnings, as the political crisis in Arab countries and higher oil prices trimmed traffic gains.
Shares of the world’s largest chemical company BASF sank 5.2% after it reported second quarter revenue that came in below market exceptions and warned that growth in the second half could be “less dynamic”.
In London, the FTSE 100 fell 0.45% as commodity producers led losses, amid concerns the uncertain global economic outlook would weigh on demand for raw materials.
Mining giants BHP Billiton and Rio Tinto declined 1.1% and 1.3% respectively, while copper producer Xstrata was down 1.6%.
Meanwhile, the outlook for U.S. equity markets was modestly upbeat. The Dow Jones Industrial Average futures pointed to a gain of 0.15%, the S&P 500 futures edged 0.2% higher, while the Nasdaq 100 futures added 0.25%.
Later in the day, the U.S. was to release government data on initial jobless claims, as well as industry data on pending home sales.
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Written By: Investing.com
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