Tech Stocks Pressure Europe

Ivaylo
11 Jul, 2006
New York City

The technology weakness followed a similar move overnight in the U.S. market, where stock indexes ended Monday after weakness in technology shares pulled the indexes down. Lucent said that revenue would come much lower than expected, thus weighing heavily on its recent acquirer, Frances Alcatel. The U.K. FTSE 100 index slipped 0.2%, the German DAX Xetra 30 index declined 0.6% and the French CAC-40 index lost 0.3%.

[R]6:30AM European stocks fall weighed down by technology sector.[/R]
European markets traded lower by mid-morning. The U.K. FTSE 100 index declined 0.2% at 5,885, the German DAX Xetra 30 index lost 0.6% at 5,673 and the French CAC-40 index slipped 0.3% at 4,968. Lucent Technologies Inc. reported that revenue for the quarter ended in June will be about $300 million less than analysts expected, with earnings per share also below estimates. France’sAlcatel which recently agreed to buy Lucent for $13.45 billion, declined 4.2% in European trading.

Engine and mobile-phone maker Safran plunged 7.2% after it said that its operating margin is set to drop in 2006. Rolls Royce, a rival to Safran for engine making, shed 1.2%. Nokia, which competes against Safran in producing mobile phones, lost 1.5%. Reinsurance company Swiss Re advanced 0.5% announcing that it intends to cut up to 2,000 positions worldwide operations by the end of 2007.

Oil prices fell for a fourth day Tuesday as concerns about North Korea''s missile tests and Iran''s nuclear program eased. Light, sweet crude for August delivery fell 22 cents to $73.39 a barrel. August Brent at London''s ICE Futures exchange, which expires at the end of this week, was down 24 cents at $72.65 per barrel.

Gold rebounded on Tuesday as buying interest from investors appeared at lower levels, but traders said the market lacked impetus to break free from the current range. Gold struck a low of $621 an ounce on profit taking from last week''s one-month high of $637, but later climbed to $628.70. It was at $627.50/629.00 by 0942 GMT, against $624.00/625.50 in New York late on Monday.

The euro was down slightly against the dollar on Tuesday, and still off the mark it hit last week on the expectations of higher interest rates and disapponting U.S. economic figures. The euro bought $1.2725 in morning European trading, down from $1.2732 in New York late Monday. The British pound slipped to $1.8404 from $1.8407. The dollar also advanced to 114.17 Japanese yen from 114.10 yen.

[R]5:00AM Stronger dollar and weaker oil prices push gold futures down.[/R]
At the NYME, the most-traded August gold ended $8.70 lower at $626.10 a troy ounce. The contract got as low as $621.90. September silver closed at $11.110 an ounce, down 29.5 cents. October platinum finished $13 lower at $1,230.70 an ounce while September palladium settled down $5.45 at $323.70 an ounce. The September copper contract advanced 3.50 cents to end at $3.5825 per pound.

The front-month August crude-oil contract in New York, which set a record high of $75.78 on Friday, dropped 48 cents to close at $73.61 a barrel. August natural gas gained 8.5 cents to end at $5.608 a million British thermal units. On the New York Board of Trade, July Arabica coffee futures settled up 0.70 cent at 99.10 cents a pound. Futures on raw sugar in foreign ports for October ended down 0.41 cent at 16.46 cents a pound.