Europe hit by U.S. data

LONDON, England (CNN) -- European markets ended lower on Tuesday after signs of weak U.S. consumer confidence renewed concerns over economic recovery and corporate accountability, erasing gains from the previous record session.

London's FTSE 100 slipped 0.5 percent to 4,180.9 and the CAC 40 blue chip index in Paris also lost 0.5 percent to 3,379.85, while Frankfurt's electronically traded Xetra Dax was down 2 percent to 3,781.95 in late trading (the German market was set to close at 1800 GMT). On Monday, the Dax posted its biggest one-day gain in more than a decade.

The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was down 1 percent after notching up its biggest one-day percentage gain in at least 15 years on Monday. Leading the declines on Tuesday were the insurance and banking sub-sectors, while engineering and information technology stocks were higher.

Markets on both sides of the border weakened after the U.S. Conference Board said consumer confidence fell sharply in July, prompting concerns that spending may slow and threaten economic recovery.

"If they feel like the consumer is losing his strength and his spending power in the market, and he's going to be putting more money into savings, that's going to make the market nervous," Tim Heekin, director of trading at Thomas Weisel Partners, told Reuters.

The insurance companies, which has been showing signs of recovery after being battered for weeks because of their heavy exposure to equities, resumed their tumble on Tuesday.

The UK's Aviva (AV) fell 5.5 percent to 415 pence, France's Axa (PCS) dropped 3.4 percent to 12.70 euros and Germany's Allianz (FALV) was down 4.8 percent to 157 euros in late Frankfurt trading. Zurich Financial fell 9.1 percent to 152 Swiss francs.

The financial sector was led lower by Banco Santander Central Hispano, Spain's biggest bank. It plunged more than 10 percent to 6.73 euros after Goldman Sachs cut its recommendation on the bank to "market perform" from "market outperform." Rival BBVA, which reports results on Wednesday, lost 6.8 percent to 9.70 euros.

Germany's Deutsche Bank (FDBK), which reports on Thursday, was down 2.9 percent to 59.56 euros and Commerzbank (FCBK) was down 4.1 percent to 11.32 euros in late trading. French bank Credit Lyonnais (PCL) slipped 0.9 percent 39.97 to euros.

Meanwhile, in the oil and gas sector, BP (BP), the world's third-largest publicly traded oil company, rose 0.5 percent to 489 pence. Early on Tuesday, it said profit fell by more than a third as gas and oil prices declined, while refining profits slumped. The results were in line with expectations. (Full story)

Volkswagen (VOW), Europe's biggest carmaker, was up 3.2 percent to 46.07 euros in late Frankfurt trading. On Tuesday, it said second-quarter net income rose 24.4 percent to 776 million euros, while analyst polled by Reuters had expected a figure of about 645 million euros. But the company also said it would miss its profit target for the year. (Full Story)

British American Tobacco (BATS), the world's second-largest cigarette firm, rose 3 percent to 708.50 pence despite reporting a 11 percent rise in first half profits and saying it remained confident about its future prospects. (Full story)

French advertising group Havas (PEU) gained 1.7 percent to 5.36 euros after saying like-for-like revenues slipped 5.4 percent in the first half, but the company said on Tuesday its profitability in the period would rise versus the second half of last year. (Full story)

French tyre maker Michelin (PML) added 4 percent to 40.36 euros, It raised its operating margin target for 2002 on Tuesday as it posted better than expected first-half profits, sending its shares up over five percent in early trading. (Full story)

The AEX index in Amsterdam fell 1.6 percent and Milan's MIB30 index lost 0.1 percent, while the SMI in Zurich declined 1.1 percent.

In the U.S. on Tuesday, the weak consumer confidence report and Congressional hearings on financial companies' ties to Enron combined to push markets lower in early trading.

At midday, the Dow Jones industrial average was down 113.47 points to 8,598.41 after gaining more than 1,000 points in the prior four sessions. The Nasdaq composite was down 13.34 points to 1,321.91, while the Standard & Poor's 500 index lost 9.26 points to 889.70.