European stocks close down for fifth straight session

European stocks fell for the fifth session in a row yesterday, led by Credit Suisse after media reports of further writedowns at the Swiss bank, and Philips on disappointing first-quarter earnings.

The FTSEurofirst 300 index of leading European shares closed unofficially 0.8 per cent lower at 1,274.68 points. It has fallen 15.4 per cent this year.

Credit Suisse shares lost 3.3 per cent after weekend newspaper reports that it could announce further writedowns of up to five billion Swiss francs (€3.3 billion) when it posts first-quarter results later this month. The bank declined to comment.

In another example of ongoing financial industry woes, Wachovia Corp, the fourth-largest US bank, posted a surprise first-quarter loss as credit problems from mortgages and other debt soared, prompting Wachovia to raise $7 billion of capital, slash its dividend and cut jobs.

Shares in Philips Electronics, whose first-quarter core profit fell 28 per cent, dropped 3.3 per cent to their lowest close since mid-July 2006.

The euro advanced against the dollar, dimming prospects for European exporters such as car makers. The DJ Stoxx auto index was the day's weakest sectoral performer in Europe with a loss of 1.7 per cent. Worries about the economy took oil and copper prices lower, and with them, shares in oil producers and miners. Financial stocks have been the worst hit by a credit crisis stemming from a collapse in US subprime or risky mortgages.

Banking stocks have been hit over the past nine months by the debacle in the risky US subprime mortgage market that forced many banks to announce massive asset writedowns and emergency capital increases.

Later in the week, investors will comb through quarterly results from JPMorgan Chase & Co, due tomorrow, Merrill Lynch & Co, due on Thursday, and Citigroup Inc, due on Friday, expected to shed light on the global credit crisis.

Analysts say the story has now moved on from subprime writedowns to problems in the real economy.

"I would have thought it would be pretty difficult to surprise people again on the extent of writedowns on essentially their gambling debts... the issue is really consumer and commercial real estate markets," said John Haynes, an investment strategist at Rensburg Sheppard Investment Management..

"The extent that people have borrowed money to do real things with that money and the extent to which they are not paying that money back is the most interesting part of the equation this quarter," he said.