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To: Mariah Smyth who wrote (13854)	9/5/2001 3:35:05 AM
From: 2MAR$	Respond to of 208838

Eurostocks lower as techs retreat; Nokia bruised By Emily Kaiser LONDON, Sept 5 (Reuters) - Slumping telecom equipment makers Nokia, Marconi and Alcatel sank European stock markets early on Wednesday, as a late-session Nasdaq collapse left global investors searching for new catalysts. Still reeling from Tuesday's gloomy 2002 outlook from Ericsson <LMEb.ST> and another profit warning from Marconi <MONI.L>, the DJ Stoxx technology index <.SX8P> dropped 4.1 percent, precariously close to three-year lows. Marconi led the way lower, losing eight percent, while Alcatel <CGEP.PA> dropped 4.5 percent and Nokia <NOK1V.HE> shed 3.8 percent. Ericsson dropped 5.5 percent, on top of Tuesday's double-digit decline. Adding to the tech pain, Europe's biggest software firm SAP <SAPG.DE> lost 4.1 percent after its chief executive told a German newspaper the information technology industry may already be in a recession and there was no sign of a turnaround. By 0730 GMT, the pan-European FTSE Eurotop 300 index <.FTEU3> was off 1.4 percent, while the narrower blue-chip DJ Euro Stoxx 50 <.STOXX50E> lost 1.9 percent. All of the DJ Stoxx sector indices were lower, and only two of Europe's 50 biggest stocks managed to gain. A $20 billion link between computer makers Hewlett-Packard <HWP.N> and Compaq <CPQ.N> initially boosted global markets on Tuesday, fuelling hopes of more deals to come and perhaps even a turnaround for battered tech stocks. However, U.S. investors panned the deal, with analysts questioning whether emboldened rivals would steal business away from the new powerhouse before it hits its stride. Nasdaq settled off 1.9 percent while the Dow Jones industrial average closed up 0.5 percent but still below the psychologically significant 10,000 mark. Both benchmarks had been higher when Europe's late-trading bourses shut on Tuesday. "A lot of people thought the HP-Compaq deal would unleash a wave of merger and acquisition activity in the sector, but that deal got the thumbs-down," said David Thwaites, European equity strategist with BNP Paribas. "The news we got out of Marconi and Ericsson yesterday show the fundamentals are still negative," he said. RESULTS PARADE With sentiment once again at rock-bottom, even better-than-expected results were not enough to lift stocks. French oil titan TotalFinaElf <TOTF.PA> reported a better-than-expected 27 percent rise in net profit for the first half, helped by cost savings stemming from the 1999 merger of TotalFina and Elf. However, its shares dipped 0.9 percent. French bank BNP Paribas <BNPP.PA> was also in the news as it recorded a smaller-than-expected 7.1 percent drop in second-quarter net profit. Falls in investment banking income and capital gains offset a solid performance in retail banking. Its shares managed only a 0.2 percent advance. Britain's IT firm Logica <LOG.L> also reported stronger-than-expected figures, yet its shares lost 4.5 percent. CHIPS DOWN Chip stocks also suffered after a U.S. report showed global semiconductor sales dropped more than 37 percent in July, pushing the Philadelphia Semiconductor Index <.SOXX> down some 3.4 percent. Europe's biggest chip maker STMicroelectronics <STM.PA> fell 4.3 percent, while Germany's Infineon <IFXGn.DE> lost 4.9 percent. Dutch chip equipment maker ASML <ASML.AS> shed 4.6 percent. Also in the news was British Airways <BAY.L>, which announced late on Tuesday 1,800 job cuts this year and plans for more in 2002 as profits and traffic decline. Its shares shed 1.3 percent in early trade. Meanwhile, its French rival Air France <AIRF.PA> said first-quarter core earnings rose 13.9 percent, more than expected, and forecast growth at its hub near Paris would help it post full-year operating profit in line with a year earlier. However, the French flag carrier also said it would freeze winter capacity growth on North American routes amid a slump in U.S. demand, and rein in its expansion worldwide. Air France shares inched up 0.5 percent. ((European stock markets team, +44 020 7542 6437, fax +44 020 7542 3722, e-mail emily.kaiser@reuters.com)) MORE * end of story *