Anglo Irish Bank shares drop after chairman loans revealed
LONDON (MarketWatch) - Oil producers weighed on Europe on Friday, but shares moved off lows after the U.S. stepped up efforts to support the economy with a plan to bail out troubled Detroit automakers.
The White House announced plans Friday to extend $13.4 billion in loans to troubled Detroit auto makers, with another $4 billion likely available in February, citing the need to avoid "disorderly liquidation" during an already troubled economic period. See full story.
Still, the pan-European Dow Jones Stoxx 600 index (ST:SXXP: news , chart , profile ) stayed in the red, down 0.6% at 196.04, as losses for oil producers kept the pressure on.
Total shares fell 1.9%, while ENI fell 4.1% and BP shares slid 3.8%.
The losses came as crude-oil futures continued to hover around multi-year lows. The contract for January delivery lost another 22 cents to trade at $36.00 in electronic trading on Friday amid continued concerns about slowing demand in an environment of contracting economic growth. See futures movers.
On a national level, the oil firm-heavy U.K. FTSE 100 index (UK:UKX: news , chart , profile ) fell 1.6% to 4,260.77, while German DAX 30 index (DX:1876534: news , chart , profile ) declined 0.3% to 4,744.00 and the French CAC-40 index (FR:1804546: news , chart , profile ) lost 0.3% to 3,223.26.
U.S. stocks opened in the green after news of the auto sector bailout emerged. Japanese stocks finished lower Friday, with shares in energy-related firms also dropping in Asian trading. See U.S. Market Snapshot. See Asia Markets.
Anglo Irish shares plummet
Banks were also lower in Europe. Investors took on board ratings changes and corporate news in the sector.
Anglo Irish Bank (UK:ANGL: news , chart , profile ) shares tumbled 16.3% after the resignation of the bank's chairman and, later in the day, its CEO. The lender's chairman revealed that he had regularly transferred personal loans from Anglo Irish to another bank, effectively concealing them from shareholders. See full story.
Credit rating agency Standard & Poor's cut its rating or outlook on 12 major U.S. and European financial institutions Friday, saying the move reflected its view of a deepening global economic slowdown.
In Europe, it cut Barclays down 0.7%, Credit Suisse down 2.1%, Deutsche Bank up 0.1%, Royal Bank of Scotland (UK:RBS: news , chart , profile ) , down 6.2%, and UBS down 2.1%. Read more on RBS In London Markets.
Merrill Lynch, in a note on the banking sector, said: "We have adopted a more cautious stance on the outlook for both loan growth and bad debts in the European banking system."
It cut French bank BNP Paribas (FR:013110: news , chart , profile ) to neutral from buy, citing the uncertainty around its planned acquisition of assets from Fortis (BE:000380118: news , chart , profile ) , the recent profit warning and management's continued reluctance to deleverage. Shares fell 6%.
Still, it wasn't all gloom for the banking sector. Shares of French investment bank Natixis (FR:012068: news , chart , profile ) rose 6.2% after it said that it will scale back its corporate and investment banking operations and cut 840 jobs by the end of next year. See full story.
ABB to take probe charge
Shares of Switzerland's ABB fell 4.7%.
The Swiss engineering group, ABB Ltd., said Friday that it will take an $850 million charge in the fourth quarter to help cover costs of a regulatory probe in the U.S. and Europe, and announced a $1 billion cost-cutting program to compensate for a weaker global market. See full story.
Thales (FR:012132: news , chart , profile ) shares rose 1.4%.
Dassault Aviation (FR:012172: news , chart , profile ) has agreed to buy Alcatel-Lucent's nearly 21% stake in avionics expert Thales for about 1.57 billion euros ($2.24 billion), or 38 euros a share, to bolster its positions as a supplier of flight electronics for its planes.
The deal didn't come as a surprise as Alcatel-Lucent (FR:013000: news , chart , profile ) earlier this month said the talks with Dassault over the sale of the stake were progressing well.
Alcatel-Lucent shares fell 0.8% and Dassault Aviation shares rose 0.2%. See full story.
Shares of German low cost carrier Air Berlin (DE:AB1000: news , chart , profile ) jumped 14.2%.
Abu Dhabi-based Etihad Airways is interested in buying a stake in the firm, the Sueddeutsche newspaper reported without citing sources. Air Berlin wasn't immediately available for comment, Dow Jones Newswires reported.
