By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) — European markets stepped deeper into negative territory on Wednesday, with drug and oil stocks dragging and a weaker close on Wall Street also weighing on sentiment.
The Stoxx Europe 600 index (ST:SXXP 265.63, -0.77, -0.29%) fell 0.4% to 265.23 points. It ended down 0.02% on Tuesday after weak German business-sentiment data pressured markets, but analysts also said investors were looking for an excuse to sell.
Sellers picked up the pace toward the close of Wall Street on Tuesday, with markets snapping a four-session winning streak. Investors snapped up safe-haven assets like gold and government bonds after Goldman Sachs forecast that the Federal Reserve might have to buy $1 trillion worth of Treasurys.
In Japan, stocks surged, led by exporters in reaction to the government’s surprise intervention in the currency markets that sent the yen tumbling against the U.S. dollar. See dollar gains as Japan intervenes
Euro-zone data on consumer prices for August showed annual inflation slowing to 1.6% against 1.7% in July.
Stocks will also focus on U.S. data, with the September Empire State index due for release at 8:30 a.m. Eastern time, as well as data on import prices for August.
At 9:15 a.m. Eastern, August industrial production data will be released.
The pharmaceutical sector came under selling pressure.
In Germany, Merck KGaA (DE:MRK 70.90, -1.09, -1.51%) fell 1.1%. The German DAX-30 index (DX:DAX 6,256, -18.95, -0.30%) slipped 0.4% to 6,249.42.
Also in Germany, shares of Deutsche Bank AG (DB 62.87, -0.67, -1.05%) (DE:DBK 48.50, -0.68, -1.38%) fell 1.1% and Deutsche Post AG (DE:DPW 13.33, -0.20, -1.48%) fell 1.1%. Deutsche Post shares have been on the decline since Deutsche Bank officially announced its intention to submit a takeover offer for the lender on Monday.
In London, AstraZeneca PLC (AZN 52.48, +0.64, +1.23%) (UK:AZN 3,343, -42.50, -1.26%) shares fell 1% on news that the U.S. Food and Drug Administration will need more time to complete its review of the anti-clotting drug ticagrelor.
GlaxoSmithKline (GSK 39.86, +0.09, +0.23%) (UK:GSK 1,279, -3.50, -0.27%) fell 0.3% after Jefferies International downgraded the stock to hold from buy, citing rising risk for the firm’s Avandia drug.
The U.K. FTSE 100 (UK:UKX 5,557, -10.44, -0.19%) fell 0.2% to 5,559.83 with miners weak. Gold prices were last down 90 cents to $1,270.80.
Next PLC (UK:NXT 2,144, +104.00, +5.10%) shares rose 3.3% after the retailer lifted its dividend and reported a rise in profit.
The French CAC-40 index (FR:PX1 3,758, -16.37, -0.43%) fell 0.5% to 3,755.24, with Credit Agricole SA (FR:ACA 11.47, -0.22, -1.84%) down 1.8% and Alcatel-Lucent SA (FR:ALU 2.22, -0.02, -1.07%) falling 1.5%.
Autos were higher in Paris, with Peugeot SA (FR:UG 24.30, +0.94, +4.00%) up 3.9% and Renault SA (FR:RNO 36.71, +0.96, +2.67%) up 1.9%. Peugeot was upgraded to overweight from underweight at Morgan Stanley. It upped estimates for 2011 earnings per share by 76%.
Shares of Nokia Oyj (NOK 9.82, -0.12, -1.21%) (FI:NOK1V 7.59, -0.06, -0.78%) fell 1%, extending a recent decline for the stock. The management shake-up at Nokia intensified on Tuesday after it emerged Chairman Jorma Ollila will step down in 2012.
Gamesa Corporacion Tecnologica SA (ES:GAM 5.49, -0.21, -3.63%) shares fell 3.7% in Madrid after Citigroup downgraded the stock to sell from hold, saying it expects volume recovery in high-margin markets to be delayed. While the slowdown could be partially offset by volume growth in Latin America, China and India, the investment bank noted these are lower-margin markets.
