European Stocks Retreat on Banks, Earnings Reports and Downgrades (13-02-2008)

Giving up some of Tuesday’s gains, European stocks declined, led by banks’ and miners’ losses, and as investors received the latest corporate earnings from some of Europe's top companies

The Dow Jones Stoxx 600 Index lost 0.9 percent to 320.23 as of 8:08 a.m. in London. Futures on the Standard & Poor's 500 Index dropped 0.2 percent, and the MSCI Asia Pacific Index slipped less than 0.1 percent.

Analysts have cut their 2008 earnings growth estimates for Stoxx 600 members to 8.6 percent from 10.3 percent in the last two weeks, according to data compiled by Bloomberg. The index is little changed so far this month.

ThyssenKrupp dropped 3.6 percent to 33.73 Euros. Germany's largest steelmaker said fiscal first-quarter profit fell 35 percent to 414 million Euros after demand for stainless steel slowed in Europe.

Wolseley sank 3.2 percent to 674.5 pence. The world's biggest distributor of plumbing and heating equipment was cut to “underweight” from “equal weight” at Morgan Stanley. The stock jumped 5 percent yesterday and is up 1.5 percent this month. Morgan Stanley analysts consider it is “looking expensive,” given its recent gains.

Safran sank 3.2 percent to 11.5 Euros. Europe's second- biggest maker of aircraft engines was cut to “sell” from “hold” at Citigroup Inc., citing a “context of slower GDP growth, deteriorating airline profits and tougher credit conditions.”

The U.K. housing market slump deepened in January to the worst since the British economy emerged from its last recession in 1992, real-estate professionals said.

Shares in U.K. mortgage bank Bradford & Bingley sank 12.4%, just off a low not seen for at least ten years of 205 pence. The bank revealed that its 2007 net profit declined 48% to 93.2 million pounds after it took losses on write downs and asset sales.

ABB sank 6.7 percent to 25.6 Swiss francs. The company said CEO Fred Kindle is leaving over “irreconcilable differences” about how to lead the company. Finance chief Michel Demare will be interim CEO while the company looks for a successor.

Source: MarketWatch - Bloomberg