European stocks end down as results, data weigh

Pan-European share indexes closed down more than one per cent yesterday after weak results from global tech giants and soft US economic data raised concerns before next week's busy company reporting schedule.

Ericsson led a battered European technology sector down after its joint venture unit with Japan's Sony came up short with its quarterly earnings. IBM, Samsung Electronics and Sun Microsystems also disappointed investors, weighing on stock markets from Asia to the United States.

By 1536 GMT the FTSEurofirst 300 index of pan-European blue chips was unofficially closed 1.4 per cent lower at 1,084.8 points, its biggest one-day fall in a month.

The narrower DJ Euro Stoxx 50 index shed 1.9 per cent to 3,016 points and ended lower on the week down for the first time in four weeks.

In New York, US stock indexes hit fresh 2005 lows as data on consumer confidence, manufacturing and import prices added to concerns about corporate earnings.

"The Michigan (consumer sentiment) index was at its weakest level since 2003," said Stuart Block, an economist at Citigroup, noting the impact of high oil prices.

"There have been signs of data weakening on both the consumer and manufacturing side so far in April, but they are not the core surveys we look at."

The blue-chip Dow Jones industrial average was 0.6 per cent weaker at 10,216.2 points, while the Nasdaq Composite Index fell one per cent to 1,927.7 points.

Around Europe, London's FTSE 100 closed 0.9 per cent lower, Paris's CAC-40 ended down 1.9 per cent and Frankfurt's DAX closed 2.1 per cent weaker. In Zurich, the SMI eased 0.2 per cent.

Europe's first-quarter results season kicks off in earnest next week, and signs are that high commodity prices may cramp earnings growth after a strong run.

"The market is looking for margin expansion in almost every sector," said Rolf Elgeti, a strategist at ABN AMRO.

"This seems curious, given a backdrop of rising input costs and subdued end-market inflation, and suggests to us that earnings disappointment lies ahead."

Drug companies were one bright spot in an otherwise bleak European market, rising after US giant Eli Lilly and Co won a landmark patent case. The victory is seen helping big-brand companies fight off generic competition.

AstraZeneca closed up 2.5 per cent while GlaxoSmithKline ended 1.4 per cent higher. Roche surged 5.7 per cent, benefiting from separate positive news on an anti-cancer drug developed by associate Genenech.

Tech stocks fared worst, with French IT consultancy Capgemini ending 4.2 per cent lower after IBM surprised Wall Street with results that missed already low expectations. The world's leading computer company blamed pockets of global economic weakness and problems closing business deals.