MW: European shares turn lower after U.S. housing data
Philips, Electrolux lower after earnings; BP shares also weak
By Sarah Turner, MarketWatch
LONDON (MarketWatch) -- European shares slipped into negative territory late Monday, dragged down in the wake of disappointing U.S. housing data.
The Stoxx Europe 600 index (ST:SXXP 246.41, -1.70, -0.69%) fell 0.7% to 246.49, giving up earlier gains after a monthly survey found home builders grew more pessimistic in July.
Among shares on the defensive, Royal Philips Electronics (NL:PHIA 24.01, -0.90, -3.59%) (PHG 31.06, -0.88, -2.76%) fell 3.3% after it reported a surge in second-quarter profit to 262 million euros but warned sales growth will slow in the second half of the year. Read more on Philips results.
Electrolux (SE:ELUXB 154.00, -13.00, -7.78%) dropped 7.7%, after the Swedish electrical appliance maker said that its second-quarter sales slipped 0.6% to 27.31 billion Swedish kronor. Net profit rose 56% to 1.03 billion kroner, beating forecasts. Read more on Electrolux results.
Swedish copper and zinc producer Boliden (SE:BOL 84.00, -2.50, -2.89%) declined 3.4% after it reported a 75% jump in second-quarter profit to 755 million kroner but sales missed analyst expectations.
BP's talks to sell half its Prudhoe Bay stake to Apache stalled twice over the weekend, Bloomberg News reported, citing a person familiar with the matter.
The firm said Monday that the cost of the response to the oil spill in the Gulf of Mexico to date amounts to approximately $3.95 billion. The government also is concerned about seeping gas from the well it's temporarily capped. See full story.
The late turn lower offset earlier gains by miners.
Rio Tinto (UK:RIO 3,049, +44.00, +1.46%) (RTP 46.24, +0.48, +1.05%) shares were up 1.7% and Xstrata (UK:XTA 917.80, +9.20, +1.01%) shares climbed 1.3% with both mineral extractors advancing as the euro headed towards $1.30 against the dollar. Read more on euro.
As the euro climbed against the dollar, copper futures, which are priced in dollars, also advanced, giving miners a lift.
Moody's Investors Service cut Ireland's sovereign debt rating by one notch to Aa2 from Aa1, citing the government's "gradual but significant loss of financial strength." However, the agency also lifted the outlook on Irish government debt to stable from negative, saying the risks are now evenly balanced. Read more on Ireland.
"The downgrade initially saw a negative reaction for the euro but then I think that the market realized that the agency put Ireland on stable, indicating no pending downgrades," said Stephen Taylor, strategist at Dolmen Stockbrokers.
The euro also rose sharply against the Hungarian forint after the International Monetary Fund and European Union walked away from talks with Hungary over government budget cuts. Read more on Hungary.
The utilities sector was also advancing on Monday, boosted by a 10.6% advance for U.K. electricity generator International Power (UK:IPR 350.30, +33.50, +10.57%) after the disclosure of deal talks that would see France's GDF Suez sell most of its overseas assets in return for a stake in the British-listed firm. GDF Suez (FR:GSZ 24.50, +0.18, +0.74%) shares rose 0.9%.
