MW: European stocks extend losses after durable-goods dataz
Heineken, Ageas and Paddy Power all rise after well-received results
By Simon Kennedy, MarketWatch
LONDON (MarketWatch) -- Europe's main stock markets extended their losses Wednesday after another round of weak economic data from the U.S., with energy group Tullow Oil falling sharply, while insurer Ageas posted well-received results.
The Stoxx Europe 600 index (ST:SXXP 246.62, -2.83, -1.13%) fell 1.1%, or 2.67 points, to 246.78, with losses accelerating after the U.S. Commerce Department said durable-goods orders rose an anemic 0.3% in July -- well below the 2.7% increase expected by economists. See full story on durable-goods orders.
Markets were also awaiting the announcement of the latest new-home sales figures in the U.S. after a record drop in existing-home sales sent stocks into a steep decline in the previous session.
Data in Europe were more positive Wednesday, with Germany's Ifo business-sentiment index continuing to climb and hitting its highest level since mid-2007. See story on surprise increase for Ifo.
The Ifo figures weren't enough to provide a boost for Germany's DAX 30 index (DX:DAX 5,885, -50.48, -0.85%) , which fell 0.9% to 5,882.94, though it still outperformed most other markets.
Among the other major indexes, the U.K. FTSE 100 index (UK:UKX 5,089, -66.77, -1.30%) fell 1.3% to 5,090.82 and the French CAC 40 index (FR:PX1 3,436, -55.42, -1.59%) lost 1.5% at 3,438.52.
Charles Glasse, a director of fund manager 2CG, said worries about the U.S. economy are continuing to outweigh any good news from Germany, or elsewhere in Europe.
"The one thing about these equity markets is that they don't stand still for long," he noted.
Glasse said he expects European markets to end the year above their current levels, but that his firm remains underweight in most sectors that are particularly sensitive to the economy.
The main exception to that call is in the banking sector, where 2CG moved to a neutral view last month because some of the strongest lenders were starting to look cheap, he added.
Shares in the banking sector were broadly lower Wednesday, with UBS (CH:UBSN 16.64, -0.35, -2.06%) (UBS 16.19, -0.16, -0.98%) down 1.4% and Barclays (UK:BARC 300.80, -8.35, -2.70%) (BCS 18.61, -0.36, -1.90%) losing 2.1%.
Shares of Tullow Oil (UK:TLW 1,190, -107.00, -8.25%) dropped 7.4% in London. The firm reported that its first-half profit more than doubled, but it also warned that projects in Uganda are likely to be delayed because of a tax dispute between the country and Heritage Oil (UK:HOIL 299.00, -20.40, -6.39%) , Tullow's partner in the region. Read more on Tullow.
Shares in Heritage fell 5.4%.
Belgian insurance group Ageas (BE:AGS 1.97, +0.03, +1.39%) rose 1.7% in Brussels. The firm, the former insurance arm of Fortis, said inflows surged 22% in the first half, though profit was down after it booked a tax benefit a year earlier.
Another big gainer was Irish bookmaker Paddy Power (IE:PLS 26.96, +0.96, +3.69%) , which rallied more around 4% after reporting a 46% jump in first-half profit, helped by a strong performance during the soccer World Cup. It said it expects to beat analyst earnings forecasts for the year.
The bookmaker's strong gains helped limit losses for the Irish ISEQ index as other stocks in the region came under pressure from Standard & Poor's decision to cut Ireland's long-term sovereign-debt rating to AA- from AA. See full story on S&P's downgrade of Ireland.
S&P said the total cost of supporting the country's banking sector could now reach 90 billion euros, compared with its previous forecast of 80 billion euros.
The ISEQ index fell 0.4% to 2,608 after dropping more than 5% in the previous session following weak results from building-materials group CRH (IE:CRG 11.83, +0.13, +1.07%) .
Shares in Bank of Ireland (IE:BIR 0.71, -0.03, -4.55%) (IRE 3.64, -0.22, -5.70%) dropped 2.5% Wednesday after the S&P downgrade, and Allied Irish Banks (IE:AIB 0.74, -0.06, -7.77%) fell 6.6%.
Among other stocks in focus Wednesday, shares of BHP Billiton (UK:BLT 1,763, -40.00, -2.22%) (BHP 64.63, -0.79, -1.21%) dropped 2.4% in London, but outperformed the rest of the sector, after the mining giant said its fiscal-year net profit more than doubled.
Shares in Dutch brewer Heineken (NL:HEIA 34.95, +0.19, +0.55%) were up 0.7% in Amsterdam after lower costs helped the group report stronger-than-expected figures for the first half of the year.
Air Berlin (DE:AB1 3.33, -0.04, -1.28%) fell 1% in Frankfurt after the airline reported a second-quarter net loss late Tuesday, due mainly to the volcanic-ash cloud that halted flights over much of Europe earlier this year.
