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Europe slumps ahead of U.S. data
LONDON, England (CNN) -- European markets were mired in red at midday on Friday as Wall Street looked set to continue its losing ways as investors braced for a raft of key economic numbers. London's FTSE 100 was down 1.9 percent to 3,861.1, the CAC 40 blue chip index in Paris fell 1.8 percent to 3,081.5 and Frankfurt's electronically traded Xetra Dax lost 1.4 percent to 3,068.18. The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was down 1.7 percent. The life assurance, electronics and media sub-sectors were among the top decliners. UK insurer Royal & Sun Alliance (RSA) fell 5.2 percent to 123.75 pence after it said the planned float of its Asia-Pacific operations would only involve its Australia and New Zealand units, but that its plans to raise cash were on track. (Full story) Germany's Allianz (FALZ), Europe's biggest insurer, slid 1.1 percent to 103.40 euros, while France's Axa (PCS), the region's No. 2 insurer, was down 3.2 percent to 13.67 euros. In the auto sector, Germany sports car maker Porsche (FPOR3) fell 4.7 percent to 413 euros after investment bank Schroder Salomon Smith Barney downgraded its recommendations for the stock to "underperform" from "outperform" and lowered its price target to 400 euros from 620. DaimlerChrysler (FDCX) lost 2.4 percent to 31.22 euros, luxury carmaker BMW (FMW) fell 1.5 percent to 30.99 euros and Volkswagen (FVOW) was down 2.3 percent to 37.54 euros. "Cars are being affected by the Porsche downgrade and there is still weakness after the new registration figures yesterday," Martin Siegel, a trader at private bank Sal. Oppenheim in Frankfurt, told Reuters. (Full story) However, struggling Italian carmaker Fiat recovered from Thursday's losses, rising 0.6 percent to 8.52 euros in early trading in Milan. Embattled chairman Paolo Fresco is expected to remain in his post until a shareholders' meeting in April, despite growing pressure to resign. Earlier this week, Chief Executive Gabriele Galateri stepped down as the group struggled to pay down its debt. (Full story) British publisher Pearson (PSON) fell 3.6 percent to 636 pence after it said the advertising gloom was showing no signs of lifting and profits at its Financial Times newspaper arm would slide a deeper than expected 20 percent excluding Internet operations. (Full story) "Sentiment is pretty poor [in the media sector] and the business environment remains hostile," John Hatherly, head of global analysis at M&G Asset Management. French media giant Vivendi Universal (PEX) lost 3.5 percent to 15.25 euros after its headquarters were raided on Thursday by French investigators probing the financial records of the media giant during the reign of chief executive Jean-Marie Messier. Messier's home was also searched. (Full story) Meanwhile, Diageo (DGE), the world's biggest spirits group, was up 2 percent to 677.5 pence after it confirmed it will sell its Burger King hamburger chain for $1.5 billion to a private consortium led by Texas Pacific. (Full story) Alcatel (PCGE) was up 1.3 percent to 4.56 euros -- claiming back some of the almost 16 percent decline from the previous session after the French telecoms equipment maker confirmed a rumour that had swirled through the afternoon, announcing plans to launch a convertible bond of up to 820 million euros. (Full story) French bank BNP Paribas PAR:PBNP] gained 0.7 percent to 38.28 euros after it said it would not counter an offer by Credit Agricole for Credit Lyonnais if Agricole made an "acceptable'' bid for their common target. (Full story) The AEX index in Amsterdam was down 2.4 percent, Milan's MIB30 index lost 1.3 percent and the SMI in Zurich slipped 0.7 percent. In the U.S. on Thursday, the Dow industrials broke a two-session winning streak as it lost steam on weak drug stocks, a declining dollar and concerns over growing military tension. (Full report) The Dow Jones industrial average fell 50.74 points to 8538.40 and Standard & Poor's 500 index lost 3.38 points to 901.58, while the Nasdaq composite rose 2.96 points to 1399.55. Wall Street was expected to open lower later on Friday. S&P 500 index futures were down 9.1 points to 891.90 on the Globex trading system, while fair value -- a measure that takes account of interest costs and dividend payments -- was calculated at 904.55. Investors will be looking for signs of recovery with a strong of economic data set for release on Friday. Among the closely watch numbers will be the producer price index, due out before the markets open, followed by the University of Michigan's preliminary index of consumer confidence and a survey of business inventories.
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