Euro Falters, European Markets Drop

123jump.com Staff
12 Feb, 2010
New York City

European markets traded mixed and the euro fell more than 1% against the dollar. Gross domestic product increased 0.1% in the fourth quarter in the euro zone and declined 4% in 2009. ThyssenKrupp AG first quarter sales declined 19%. Michelin SCA full year revenues fell 9.8%.

[R]3:30 PM Frankfurt, 9:30 AM New York – European markets traded mixed and the euro fell more than 1% against the dollar. Gross domestic product increased 0.1% in the fourth quarter in the euro zone and declined 4% in 2009.[/R]

The European leaders issued more statements to calm investors and support Greece. However, the lack of details is unnerving the markets. Markets are expecting clear direction from political leaders.

German Chancellor Angela Merkel and other leaders in the region said they are working on a bilateral action that may provide direct lending to Greece under tough pre-conditions.

The euro declined 1.04% to $1.3573 in Frankfurt trading and the 2-year German bond yield declined 3 basis points to 1.01%. The euro has declined 7% in the year so far.

The euro area and in the wider EU27 zone GDP in the fourth quarter increased 0.1% from third quarter 2009. Seasonally adjusted GDP compared to the quarter a year ago decreased 2.1% in the euro area and 2.3% in the EU27 in the fourth quarter of 2009.

For the year 2009, the gross domestic product in the region declined 4%.

Industrial output in 16-nations euro zone decreased 1.7% in December from the previous month and dropped 5.0% from a year ago.

Earnings Review

Eni SpA, an oil company said fourth quarter revenues fell 9.6% to €22.19 billion from €24.55 billion a year ago. Net profit for the quarter was €641 million or €0.18 per diluted share compared to net loss of €874 million or €0.24 per share a year ago.

Michelin SCA, the manufacturer of tires said full-year revenues fell 9.8% to €14.8 billion from €16.4 billion a year ago. Net profit for the full-year fell 71% to €104 million compared to net profit of €357 million a year ago.

ThyssenKrupp AG, the steelmaker said first quarter sales fell 19% to €9.35 billion from €11.52 billion a year ago. Net profit for the quarter fell 2.4% to €164 million or €0.36 per diluted share compared to net profit of €168 million or €0.35 per share a year ago.

Europe Markets Review

In London FTSE 100 Index traded lower 16.99 or 0.33% to 5,144.49, in Paris CAC 40 Index decreased 3.39 or 0.09% to 3,613.36 and in Frankfurt DAX index traded higher 15.93 or 0.29% to 5,519.86. In Zurich trading SMI increased 23.01 or 0.36% to 6,426.43.