European stocks fell for the third straight day, yesterday, as worries persisted about financial sector balance sheets and the breadth and depth of the recession.
The FTSEurofirst 300 index of top European shares fell 1.4 per cent to 719.38 points, hitting its lowest close since March 2003 for the third successive day.
The broader STOXX 600 index fell 1.4 per cent to 172.86 points, led lower by drug stocks.
Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC-40 were between 0.7 and 1 per cent lower.
As European bourses were closing, Wall Street shares, which fell to 12-year closing lows on Monday, were higher.
The Dow Jones, S&P 500 and Nasdaq Composite were up between 1.3 and 1.7 per cent.
US consumer confidence plunged to another record low in February, with expectations that already dire economic conditions will continue to weaken and the jobs market will further deteriorate. The Conference Board, an industry group, said its sentiment index fell to 25 from 37.4 in January.
US house prices fell at the fastest pace on record in December.
Ben Bernanke, the Federal Reserve chairman, said in testimony that unless government efforts succeed in restoring financial stability, the recession may not end this year.
"The markets are disenchanted by the policymakers' attempts to stabilise the financial system," said Mike Lenhoff, chief strategist and head of research at Brewin Dolphin Securities, in London. "They're taking the view that the policymakers are still struggling."
"Until we get some positive news flow, which we are not getting, it strikes me that the prevailing pressures on these markets will remain downward."
"The recession is not just deepening, but widening."
Pharmaceuticals took most points off the DJ Stoxx 600 Index. Shares in Roche fell 3.8 per cent as analysts said it will likely up its bid for the 44 per cent of Genentech it does not own, after the US biotech group urged shareholders to reject the offer.
Swiss biotech group Basilea plunged 36.8 per cent after filing a claim against US partner Johnson & Johnson over delays in launching an antibiotic to treat drug-resistant superbugs after the approval process hit a setback in Europe.
Novartis and Sanofi-Aventis fell 1.9 and 1.7 per cent respectively.
Among financials, AXA, Europe's second biggest insurer, fell 5.6 per cent on renewed concerns over the company's balance sheet, raising prospects of a capital increase.
Shares in Belgian banking and insurance group KBC slipped 3.4 per cent after Deutsche Bank downgraded it to "sell" from "hold" and cut its target price to €8 from €15.
Swiss banks UBS and Credit Suisse fell 1.5 per cent and 3.6 per cent respectively. German insurer Allianz lost four per cent.
The DJ Stoxx insurance index fell 3.4 per cent.
Crude prices hovered around $38 a barrel, and most energy shares were lower.
Total, ENI, Royal Dutch Shell, Repsol and Statoil lost between 0.7 and 2 per cent.
On the upside, Thomson Reuters, owner of Reuters News, rose 6.6 per cent, after its full-year results beat forecasts.
Deutsche Borse rose 1.3 per cent ahead of full-year results.