European equities stumbled lower yesterday afternoon on concerns that earnings, like Royal Dutch Shell's, and outlooks, like STMicroelectronics', were not living up to the bullish expectations already priced into shares.
A lower opening on Wall Street further depressed market sentiment as investors shrugged off data showing a new fall in weekly jobless claims last week to focus on the flow of corporate news.
But there was good news from Europe's second-largest drugmaker AstraZeneca and truck-maker Volvo, which both reported forecast-topping quarterly profits and made positive comments looking forward.
By 1345 GMT, the FTSE Eurotop 300 index of pan-European blue chips was down 0.9 per cent at 894 points, with three shares falling for each one rising, while the narrower DJ Euro STOXX 50 edged one per cent lower to 2,486.
"Growing uncertainties in the macro-economic environment about the sustainability of the recovery have now extended to the micro-economic front with the resurgence of bad news after two quarters of market gains," said strategist Jean-Francois Cauvet from broker E.T.C. Pollak Prebon.
Around Europe, the FTSE 100 shed 1.1 per cent, the CAC 40 fell one per cent, the DAX trimmed 0.6 per cent and the Swiss Market Index was off one per cent.
Wednesday's news that the Bank of England's Monetary Policy Committee came close to approving a rise in UK interest rates continued to weigh on sentiment amid fears that wary consumers were not ready yet to digest a rate hike.
In New York, the tech-laden Nasdaq Composite sagged 0.9 per cent after poor earnings from Computer Associates triggered caution ahead of results from global software leader Microsoft after yesterday's close.
The Dow Jones industrial average shed 0.1 per cent.
In the oil sector, Royal Dutch/Shell undershot forecasts for third-quarter profits due to a series of impairment charges. Profits in all key areas of the world's second-biggest oil group missed market expectations, but gas and power was the biggest disappointment.
Royal Dutch shares fell 2.8 per cent in Amsterdam to 38.15 euros.
A quarterly loss and stagnant margin forecast at Europe's largest chipmaker STMicroelectronics drove the company's shares 4.4 per cent lower, while chip-making peer Infineon fell 1.6 per cent and chip equipment maker ASML was 2.8 per cent lower.
Philips Electronics was also hit after Asian rival Sony Corp reported a 25 per cent drop in quarterly profit, hit by falling demand for audiovisual products, and cut its full-year operating profit forcast by 23 per cent.
In the insurance sector, Britain's Aviva dropped 4.8 per cent to 480 pence after the group unveiled nine-month life insurance and pension sales below expectations, although it made some upbeat comments on its outlook.
Shares in Amvescap fell 5.8 per cent to 465 pence after the Anglo-US fund management firm posted underlying profits of £77.2 million in the third quarter, up 24 per cent on the previous quarter but below the consensus forecast.