Europe in negative mood

LONDON, England (CNN) -- European markets ended lower on Monday, pressured by telecom and tech stocks, as Wall Street also stumbled at the start of what is likely to be a volatile week.

Wall Street was hampered by more worries over corporate earnings, as well as concerns about possible U.S. military action against Iraq and first anniversary of the September 11 terror attacks.

London's FTSE 100 slipped 1.1 percent to 4,062.4 and the CAC 40 blue chip index in Paris lost 1.4 percent to 3,199.82, while Frankfurt's electronically traded Xetra Dax was down 2.4 percent to 3,40.1.83 in late trading (the German market was set to close at 1800 GMT).

The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was down 1.5 percent, with the computer, insurance and telecom sub-sectors among the decliners.

France Telecom (PFTE) fell 8.9 percent to 10.20 euros. The board of France Telecom meets on Thursday to discuss the future of Bon and ties with loss-making German mobile phone company MobilCom. Analysts told CNN that Bon could leave allowing the company to raise billions of euros to cut debts of about 70 billion euros. (Full Story)

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Orange (PORA), France Telecom's mobile phone unit, dropped 7.3 percent to 4.68 euros.

Deutsche Telekom (FDTE), Europe's biggest telecom company, was down 3.6 percent to 10.31 euros in late Frankfurt trading. The top economic adviser to Conservative national election candidate Edmund Stoiber called on the government to sell as soon as possible its remaining 43 percent in the country's dominant phone company.

Vodafone (VOD), Europe's biggest mobile phone operator, lost 3.3percent to 89 pence, while UK rival mm02 (OOM) fell 4.3 percent to 44.76 pence.

Meanwhile, Sweden's Telia, the Nordic region's biggest telecoms operator, gained 3.4 percent to 28.10 euros after saying it would cut 400 jobs at its ailing international carrier to return the business back to profitability. (Full story)

Semiconductor stocks were slower after Schroder Salomon Smith Barney downgraded the sector from "in line" to "outperform."

Germany's Infineon Technologies (FIFX) was down 4.2 percent to 9.34 euros in late Frankfurt trading, France's STMicroelectronic (PSTM) lost 4.7 percent to 18.32 euros and Holland's Philips Electronics dropped 7.3 percent to 16.86 euros. ASML, the Dutch semiconductor equipment maker, fell 5.5 percent to 8.70 euros.

British Energy (BGY), the country's biggest electricity generator and provider of nuclear power, plunged 65.3 percent to 28.94 pence after it received emergency government funding on Monday, allowing the group to stay afloat while it seeks new financing. The government will provide British Energy with £410 million ($639 million) of working capital for the next three weeks. (Full story)

The airline industry was also lower, with British Airways (BAY), Europe's largest airline, slid 2.4 percent to 131.99 pence. The company is teetering on the brink of being dumped out of the benchmark FTSE 100 index as its market capitalisation slides below the value of the 110th biggest company on the London Stock Exchange. The FTSE 100 is recalculated on Tuesday. BA has been in the top-flight index since it was privatised in April 1987.

Air France, Europe's most profitable airline, fell 4 percent to 11.15 euros. Pilots at France's flagship airline are expected to end a four-day strike later on Monday. The dispute over pay has grounded scores of planes but a quarrel over pay has not been settled yet. (Full story)

The AEX index in Amsterdam declined 2.7 percent and Milan's MIB30 index lost 2.2 percent, while the SMI in Zurich slid 1.5 percent.

In the U.S. on Monday, stocks fell in early trading after downgrades in the financial sector and a weak outlook from media company AOL Time Warner -- marking the start of a tough week that brings key addresses from President George W. Bush and Federal Reserve Chairman Alan Greenspan, as well as the one-year anniversary of the terrorist attacks against the United States. (Full story)

At 1030 EST, the Dow Jones industrial average was down 80.59 points to 8,346.61 and the Nasdaq composite index had lost 21.67 points to 1,273.63. The Standard & Poor's 500 index stood at 885.84, down 8.08 points.