European Blue-Chip Stocks Hit 6-Year Lows
European blue-chip stocks closed at their lowest level in more than six years Tuesday as war fears were compounded by financial worries about some major companies.
The FTSE Eurotop index of the Continent’s 300 largest stocks ended down 2.9% at 754.35, its weakest close since January 1997.
The index has plunged 11.3% this year, more than double the decline of the U.S. Standard & Poor’s 500 index.
In dollar terms, adjusted for the buck’s weakness against the euro, the FTSE Eurotop 300 is down 8.7% this year.
Individual market indexes falling to multiyear lows Tuesday included Germany’s DAX index, which slid 3.3% to 2,485.50; the AEX index in the Netherlands, which lost 3.9% to 257.31; and the Swiss market index, down 2% to 4,095.80.
Among other markets, the French CAC index fell 3.7% and the British market slumped 2.2%.
European bourses were hammered as a dismal U.S. consumer confidence report raised new fears that the global economy could be tipped into recession by a U.S.-Iraq war, analysts said.
There also was continuing fallout from Dutch supermarket giant Ahold’s revelation Monday that it had vastly overstated earnings over the last two years. The company fired its chief executive.
Ahold’s New York Stock Exchange-traded shares dropped 72 cents to $3.44, after plummeting $6.53 on Monday.
Other corporate news also riled investors in Europe on Tuesday. Shares of British insurer Prudential fell 18% on fears that it may cut its dividend payment, after the company said it needed to maintain its financial flexibility.
German drug and chemical leader Bayer shed 14% on mounting worries about its growing exposure to potentially massive damages claims.
The company said Tuesday that it was seeking to settle 500 more lawsuits related to its withdrawn cholesterol drug Baycol.
In Paris, media titan Vivendi Universal fell more than 10% after a French media report said the company may get less money than expected for the sale of an Italian pay-television unit, Bloomberg News reported.
