Eurostocks drop as D.Telekom and Nokia slide
Tuesday January 23, 3:39 am Eastern Time
By Huw Jones
PARIS, Jan 23 (Reuters) - Deutsche Telekom and Nokia pulled European shares lower early on Tuesday as new economy stocks were hit by more earnings worries, and many investors held tight ahead of next week's Fed meeting.
Nokia tumbled more than four percent after Dresdner Kleinwort Benson downgraded its rating on the world's biggest cellphone maker to ``sell'' from ``reduce'', though kept its earnings estimates unchanged.
``We think that the newsflow in handsets in the next few months will be sufficiently dire to convince the market that handsets are commodities, and should be valued as such,'' Dresdner analyst Per Lindberg said.
A sales warning from Texas Instruments (NYSE:TXN - news), the U.S. cellphone chip maker, late on Monday added to the sector's woes.
Deutsche Telekom was also among Europe's biggest blue chip decliners, down three percent after reporting disappointing preliminary results.
Europe's second largest telecom company unveiled a fourth-quarter net loss of 1.0 billion euros ($929.4 million), greater than many analysts had expected.
Other telecoms were caught in the downdraught, with France Telecom off 2.8 percent, British Telecom (quote from Yahoo! UK & Ireland: BT.L) off 2.7 percent, Telefonica down 2.2 percent, and Vodafone Group (quote from Yahoo! UK & Ireland: VOD.L) 1.9 percent lower.
As techs, telecoms and oils pulled European bourses lower, insurers and financials were able to make some headway.
The Eurotop 300 index was off 0.6 percent, while the narrower Euro Stoxx 50 index shed nearly one percent.
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