Stocks Drop for Fourth Session on Slow U.S Job Growth
European shares dropped for a fourth straight session Friday as a slowdown in U.S. job growth signalled that country's economic recovery could be losing steam just as interest rates have started to climb.
The FTSE Eurotop 300 index closed down 0.7 percent at 989.09 points, its weakest close in a month and down 1.6 percent for the week, as trading volume remains average at best.
The DJ Euro Stoxx 50 index fell 0.8 percent to 2,783.99 points.
"The market seems to have hit a wall. There is uncertainty coming out of the macro data, profit warnings and the U.S. payrolls today," said Michael O'Sullivan, a strategist at State Street Global Advisers.
"The earnings season beginning next week should provide more good news than bad. Compared to history there have been relatively few pre-warnings," O'Sullivan said.
European companies extended their losses after news that only 112,000 new U.S. jobs were created last month, half the amount economists had expected.
European companies depend on the U.S. recovery to sell more goods such as cars and chemicals as the euro-zone revival remains sluggish.
Technology was hit hardest as chip-related shares Philips, ASML and Infineon fell after Morgan Stanley cast doubt over the outlook for third-quarter revenue from global chip bellwether Intel.
In addition, worldwide sales of semiconductors jumped 37 percent in May to their highest level since December 2000 but Citigroup Smith Barney said the cycle had peaked.
European technology leader Nokia also gave back a good part of its gains for the week.
Meanwhile, a six percent drop in U.S. car sales in June to their weakest level in six years rattled European car exporters. DaimlerChrysler and Volkswagen both fell nearly two percent.
Volkswagen also suffered from a cut in its debt rating as ratings agency Moody's said there was a continued overall declining trend in the German group's operating performance.
British grocers sank again as William Morrison tumbled 11 percent to 200 pence after it became the second UK supermarket to warn on profits in as many days. The family-run grocer blamed a continuing slide in sales at newly acquired Safeway.
British supermarket leader Tesco was off 1.5 percent.
Investors took refuge in defensive areas like drugs and utilities, the latter kept aloft after Deutsche Bank increased its price target on Germany's RWE to 46 from 41.50.
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