Europe stocks dip

July 22, 2009
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, LONDON, Jul 22 – European shares declined on Wednesday, with many investors taking profits, as the second-quarter earnings season continued apace in the United States.

Big-name US companies with upcoming results include Boeing, eBay, Morgan Stanley, PepsiCo, Pfizer and Wells Fargo.

In late morning European trade, London\’s FTSE 100 index of top shares dropped 0.21 percent to 4,471.41 points.

Frankfurt\’s DAX 30 sank 0.33 percent to 5,078.86 points and the Paris CAC 40 shed 0.71 percent to 3,281.12 points near the half-way mark.

The DJ Euro Stoxx 50 index of leading eurozone shares was down 0.45 percent at 2,508.65 points.

On the foreign exchange market, the European single currency dipped to 1.4191 dollars.

"The FTSE 100 fell as investors looked to cash in their profits after the index rose almost 10 percent in seven trading days," said Joshua Raymond, Market Strategist at financial spread-betting firm City Index.

"The recent rise had been led largely by the financial and mining sectors.

"As a result, these were always going to be the first sectors from which investors looked to take profits. This is what we are seeing today, with Kazakmhys and Lonmin the main sufferers."

Wall Street had risen Tuesday in choppy trade as the market weighed improved earnings reports and Federal Reserve chairman Ben Bernanke\’s cautious comments about economic recovery.

In Asia on Wednesday, Hong Kong share prices fell 1.30 percent as investors took profits following six days of rises, dealers said.

But Tokyo ended at the highest level in more than two weeks, climbing for a sixth straight day on hopes of a recovery in corporate earnings. The Nikkei-225 index rose 0.74 percent to 9,723.16 — the best finish since July 3.

Investors are hoping that the upcoming raft of domestic corporate results will offer more good news in the wake of better-than-expected earnings reports from US firms.

Technology shares got a boost from strong earnings results from US computer maker Apple, which reported 1.23 billion dollars in profit in its latest fiscal quarter on strong sales of iPhones and Macintosh computers.

In New York trade on Tuesday, the Dow Jones Industrial Average increased 0.77 percent to finish at 8,914.94, its seventh straight session of gains.

The technology-heavy Nasdaq added 0.36 percent to 1,916.20 — its 10th consecutive increase — and the broad Standard & Poor\’s 500 index advanced 0.36 percent to 954.58.

The US market wobbled amid mostly better-than-expected earnings reports and Bernanke\’s economic update to Congress, but regained momentum late in the day.

Bernanke, delivering his semi-annual economic report to Congress, cited "notable improvements" in financial markets and a somewhat brighter economic outlook, along with considerable risks led by high unemployment.

The blue-chip Dow found support all day after Caterpillar reported quarterly earnings that were three times better than the consensus forecast estimate and issued higher than expected guidance for its 2009 fiscal year.

Merck also provided firm support after posting a 12-percent decline in second-quarter net profit that was not as bad as the market expected.
 

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