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Feb. 16, 2012, 1:33 p.m. EST

Europe hit by Greece but U.S. data curb losses

U.S. jobless claims drop to lowest level since 2008

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By Sara Sjolin, MarketWatch

LONDON (MarketWatch) — European stock markets fell Thursday after Moody’s Investors Service threatened to downgrade more than 100 financial institutions and fresh worries about Greece’s second bailout weighed on sentiment. But U.S. economic data curbed losses.

Among the biggest losers in Europe, Italian Enel SpA /zigman2/quotes/207756670/delayed IT:ENEL +0.29%  sank 5.4% after J.P. Morgan Cazenove downgraded the stock to neutral, citing problems with rising gas prices.

Investors pulled out of stocks as media reports said some euro-zone nations wanted to delay Greece’s next bailout money until after April elections, while making arrangements to keep it from going into default.

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EU warns on Greece

The EU warns that time is running out for Greece to meet conditions for financial aid.

Adding pressure to the situation, tensions appeared to be building between Germany and Greece. Greek President Karolos Papoulias reportedly accused Germany of insulting his country after German Finance Minister Wolfgang Schaeuble likened Greece to a “bottomless pit,” in a radio interview Wednesday.

The Athens General Index /zigman2/quotes/210597948/delayed GR:GD -0.49%  gained 1.1% to 785.02, with National Bank of Greece SA up 5.1% and Hellenic Telecommunications Organization SA /zigman2/quotes/202440586/delayed GR:HTO -0.91%   off 3.3%. The Athens index fell 5.1% on Wednesday.

“I think the markets have priced in that Greece will have to leave the euro. But what is worrying the markets right now is that there is no clear direction and we don’t know if Greece will be forced out,” said Predrag Dukic, senior equity sales trader at CM Capital Markets in Madrid.

Investors slowed down the selloff pace in afternoon trade after jobless claims in the U.S. unexpectedly fell to the lowest level since March 2008. Separately, housing starts rose 1.5% in January, beating economists expectations. The Philadelphia Fed’s manufacturing index also surprised positively and reached the highest level since October.

Wall Street opened slightly higher on Thursday. Read more on U.S. stocks

In Europe, Spanish stocks were hit the hardest with the Ibex 35 index /zigman2/quotes/210597995/delayed XX:IBEX -1.69%  down 2.1% to 8,558.10, after the country’s stock market regulator Wednesday night lifted a ban on short selling of financial stocks.

Bankia SA /zigman2/quotes/205465641/delayed ES:BKIA -3.99%  plunged 7.3%, Banco Popular Espanol SA  dropped 6.2%, BBVA SA /zigman2/quotes/209653399/delayed ES:BBVA -2.06%   /zigman2/quotes/204078760/composite BBVA -2.37%  declined 4.1% and Banco Santander SA /zigman2/quotes/205677933/delayed ES:SAN -2.87%   lost 2.6%.

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Yields on 10-year Italian government bonds were off 1 basis point to 5.61%.

Yields on 10-year Spanish government bonds were down 8 basis points to 5.3%.

The closing value for the Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP -1.01%  was delayed because of technical issues, the index publisher said. Read more on Stoxx 600.

Moody’s darkens the mood

The broader European stock market was also weighed down after Moody’s late Wednesday placed 17 global and 114 European financial firms on ratings review due to the euro-zone crisis.

German Commerzbank AG /zigman2/quotes/200193353/delayed DE:CBK -0.70%  lost 1.7% and added downward pressure to the DAX 30 index /zigman2/quotes/210597999/delayed DX:DAX -1.44% , down 0.1% to 6,751.96.

Daimler AG /zigman2/quotes/205332368/delayed DE:DAI -2.95%  pulled back 0.6% after a report showed that new car registrations in the European Union in January declined 7.1% compared to the same period last year.

Pointing in the opposite direction, Renault SA /zigman2/quotes/200919924/delayed FR:RNO -3.84%  gained 4.5% after the auto group reported a 39% drop in 2011 profit, but beat its own cash flow target. France’s CAC 40 index /zigman2/quotes/210597958/delayed FR:PX1 -1.22% /zigman2/quotes/210597958/delayed FR:PX1 -1.22% closed 0.1% higher at 3,393.25, further supported by Capgemini /zigman2/quotes/206891951/delayed FR:CAP -0.44%  jumping 7.9%. The consulting firm reported an 11% rise in revenue for 2011 and guided towards an increase in operating margin in 2012.

In London, heavyweight HSBC Holdings PLC /zigman2/quotes/203901799/delayed UK:HSBA -1.21%  lost 0.4%, leading the FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX -0.97%  0.1% lower to 5,885.38.

Resource stocks also added downward pressure to the U.K. index on the back of declining commodity prices. Evraz PLC /zigman2/quotes/202291633/delayed UK:EVR -1.80%  dropped 3.6%, Essar Energy PLC  was off 1.8%, while miners Anglo American PLC /zigman2/quotes/201381512/delayed UK:AAL -5.31%  and Rio Tinto PLC /zigman2/quotes/208934945/delayed UK:RIO -3.03%  both lost over 1%.

Among other notable decliners Thursday, Randstad Holding NV /zigman2/quotes/202421454/delayed NL:RAND -1.89% , dropped 4.2% after the firm swung to a loss in the fourth quarter.

Norsk Hydro ASA /zigman2/quotes/205836882/delayed NO:NHY -4.38%  added 4.8% in Oslo. The aluminium producer said it swung to a 749 million kroner loss ($128.9 million) in the fourth quarter, but said it sees increased aluminium demand in 2012.

Also rising, Nestle SA /zigman2/quotes/208115528/delayed CH:NESN +0.44%   /zigman2/quotes/210131093/composite NSRGY +0.51%  gained 2.1% after reporting earnings. The Swiss firm said organic sales grew 7.5% for 2011, beating its own long-term target range of 5% to 6%.

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GR : Athens Exchange
790.14
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GR : Greece: Athens
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XX : Spain: Madrid
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ES : Spain: Madrid
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US : U.S.: NYSE
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ES : Spain: Madrid
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XX : STOXX
407.85
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/zigman2/quotes/200193353/delayed
DE : Germany: Frankfurt
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DAX
DX : Xetra Indices
13,787.73
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DE : Germany: Frankfurt
56.34
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P/E Ratio
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N/A
Market Cap
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FR : France: Euronext Paris
34.07
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FR : France: Euronext Paris
5,611.69
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FR : France: Euronext Paris
5,611.69
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FR : France: Euronext Paris
124.15
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UK : U.K.: London
403.25 p
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UK : FTSE UK
6,735.71
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UK : U.K.: London
500.80 p
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2,663.50 p
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UK : U.K.: London
5,946.00 p
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NL : Netherlands: Euronext Amsterdam
55.16
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NO : Norway: Oslo
kr 40.16
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kr86.06 billion
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CH : Switzerland: SWX
CHF 100.88
+0.44 +0.44%
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P/E Ratio
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2.68%
Market Cap
CHF279.73 billion
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US : U.S.: OTC
$ 113.22
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Jan. 15, 2021 3:59p
P/E Ratio
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2.06%
Market Cap
$314.68 billion
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Sara Sjolin is a MarketWatch reporter, based in London.

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