Vodafone falls after disappointing update; Heineken gains By William L. Watts, MarketWatch FRANKFURT (MarketWatch) — European stocks extended losses Friday after a request for help from Valencia’s regional government underlined worries about Spain’s debt load and Spanish bond yields soared. The Stoxx 600 Europe index XX:SXXP -1.23% fell 1.1% to 258.93, paring the index’s weekly gain to 1%. “Nerves with regard to Europe have not gone away,� said Keith Bowman, an equity analyst at Hargreaves Lansdown PLC in London The Valencia government said Friday it would apply for help from a new government fund in an effort to meet its refinancing needs. Spanish bonds tumbled, sending the 10-year yield ES:10YR_ESP +3.17% rising 0.24 percentage point to 7.20%, according to electronic trading platform Tradeweb. Moreover, the yield premium demanded by investors to hold 10-year Spanish bonds over German bunds pushed above 6 full percentage points. Spain’s IBEX 35 index XX:IBEX -4.18% plunged 5.2% to 6,288.80. Italian government bonds also succumbed to pressure, sending the 10-year yield IT:10YR_ITA +2.23% up 0.15 percentage point to 6.15%. Italy’s FTSE MIB stock index XX:FTSEMIB -4.23% dropped 4.2% to 13,092.10. Market participants took little solace from the widely-anticipated approval of Spain’s bank bailout plan by euro-zone finance ministers in a conference call earlier Friday. The agreement clears the way for Spain to seek up to 100 billion euros ($123 billion) in aid to recapitalize its ailing bank sector, though the final amount of the package will be determined after a detailed assessment of the sector’s capital needs. Shares of Vodafone Group PLC UK:VOD -2.40% lost 2.4% in London, after the mobile giant reported worse-than-expected fiscal first-quarter revenue on Friday. Shares of Telefonica SA ES:TEF -6.29% TEF -7.13% dropped 6.5% in Madrid. Spanish banks were also under pressure, with BBVA SA ES:BBVA -6.02% dropping more than 6% and Banco Popular Español ES:POP -5.66% losing more than 5%. Among major indexes, London’s FTSE 100 UK:UKX -0.99% fell 1% to 5,658.35. The German DAX 30 index DX:DAX -1.49% declined 1.5% to 6,657.47. In Paris, the CAC 40 stock index FR:PX1 -1.99% dropped 2% to 3,199.99. “Conflicting forces seem to be at work across asset markets. On the one hand, growth prospects are broadly weaker, and on the other, policy intervention continues to surprise on the proactive side,� wrote strategists at Barclays in London. U.S. Federal Reserve Chairman Ben Bernanke, in congressional testimony this week, offered no hint that another round of quantitative easing is imminent, but said the central bank was prepared to use its tools if needed. Banks were under pressure. UBS AG CH:UBSN -4.00% fell nearly 4%, while HSBC Holdings PLC UK:HSBA -2.37% lost 2.4%. Shares of Dutch brewer Heineken N.V. NL:HEIA +0.28% rose 0.8% in Amsterdam after it offered buy Singapore beverage firm Fraser & Neave Ltd.’s entire stake in Asia Pacific Breweries Ltd. for 5.1 billion Singapore dollars ($4.06 billion). Analysts said the move could trigger a takeover fight between Heineken and suitors tied to Thailand tycoon Charoen Sirivadhanabhakdi. Read about Heineken's bid Shares of London Stock Exchange Group PLC UK:LSE -1.56% dropped 1.7%, erasing an earlier gain after Singapore Exchange Ltd. denied it was in talks with the LSE for a potential merger, but said it was open to collaborations and partnerships that may benefit its shareholders. A representative from LSE declined to comment on the reports on Friday. Read about merger talk Shares of miner Anglo American PLC UK:AAL +0.07% trimmed earlier gains as markets extended losses to remain up 0.1%. The company reported a 12% quarterly rise in iron-ore output to 12.9 million metric tons. William L. Watts is MarketWatch's European bureau chief, based in Frankfurt.

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