Europe nears new 9-month low

Another day, another tech rout after Wall Street's latest tumble

LONDON, England -- European markets fell close to nine-month lows on Monday, led by technology and media stocks, and worries that financial institutions may need to pump more money into their insurance businesses.

Markets were further pounded by a strengthening euro (more) -- which could dent exports by European companies -- as well another poor start on Wall Street after more negative corporate news, and concerns over a possible new debt crisis in Latin America. (Full story)

London's FTSE 100 fell 1.5 percent to 4,541.9 and the CAC 40 blue chip index in Paris dropped 3.4 percent to 3,669.24, while Frankfurt's electronically traded Xetra Dax was down 3.6 percent to 4,078.68 in late trading (the German market was set to close at 1900 GMT).

The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, lost 2.7 percent, near lows last reached in September. The computer, information technology, media and insurance sub-indices leading declines.

"A bit of everything has been thrown into the pot today," Martin Brooker, a pan-European equity strategist at E*Trade Securities.

"The weak dollar is especially negative for equities as most of the big-cap European companies are exporters. Rising political tensions, Moody's downgrading France Telecom and concerns over exposure to Latin America are not helping."

Vivendi Universal (PEX), the world's second-largest media company, led the media sector lower, tumbling 23.3 percent to 18.75 euros. The company said it was selling a 15.6 percent stake in its utility unit Vivendi Environnement in a move to cut its debt by 1.7 billion euros. (Full story)

Vivendi extended losses after British telecoms operator BT Group (BT) stalled the French media giant's plans to raise its stake in French telecom firm Cegetel. BT said now was not the right time to sell its 26 percent stake, the holding is seen as crucial to Vivendi to boost its earning potential.

France Telecom (FTE) plunged 16.2 percent to 10.40 euros after Moody's Investors Service cut the group's credit rating to one notch above "junk" status, saying it had concerns over the telecom's ability to reduce its debt in the near term.

That downgrade helped push Deutsche Telekom (FDTE) lower as well. It was down 5.2 percent to an all-time low of 8.58 euros in late Frankfurt trading, as investors continue to fret over the group's 67.3 billion euro debt.

Mobile phone operators, Orange (PORA) and mmO2 (OOM) came under pressure after investment bank Goldman Sachs said it had lowered its rating on the two stocks. Orange fell 10.8 percent to 4.55 euros in Paris, while mmO2 lost 1.3 percent to 36.45 pence in London.

Vodafone (VOD), Europe's biggest mobile phone company, dropped 2.8 percent to 88.25 pence.

Nokia, the world's biggest mobile phone maker, fell 8.2 percent to 12.14 euros, while Swedish rival Ericsson dropped 9.1 percent to 14 crowns.

Britain's financial watchdog raised concerns over the financial stability of life assurers following recent slumps in stock markets, where insurers invest the majority of their money. Switzerland's Credit Suisse fell 8.1 percent to 43.20 Swiss francs, even though its Winterthur insurance unit reportedly played down concerns it will need fresh capital injections from its parent.

Britain's biggest insurer CGNU (CGNU) fell 3.4 percent to 499.96 pence after saying it had used around £2 billion of "future profits'' to boost solvency margins. Zurich Financial shed 5.8 percent, while Allianz (FALZ) was down 5.5 percent and Munich Re (FMUV2) was 5.9 percent lower in late Frankfurt trading.

Santander Central Hispano, Spain's biggest bank which makes about 40 percent of its Latin America earnings from Brazil, fell 6.4 percent to 7.49 euros as investors worried about the prospect of victory by the left-leaning frontrunner Luiz Inacio Lula da Silva in October's Brazilian presidential election. (Full story)

The AEX index in Amsterdam and Milan's MIB30 index both lost 2.6 percent, while the SMI in Zurich dropped 3.4 percent.

In the U.S. on Monday, markets continued a more than five-week slide on concerns that a faltering global economy may hurt profits.

That sentiments was reinforced by negative corporate news from blue-chips Merck (MRK) and United Technologies (UTX), and tech names WorldCom (WCOM) and Gemstar-TV Guide (GMST). (Full story)

At midday, the blue-chip Dow Jones industrial average was down 19.11 points, or 0.2 percent, to 9,234.68, while the tech-laden Nasdaq composite was down 8.35 points, or 0.6 percent, to 1,432.61.