European Stocks Plunge

In case anyone was waiting to be rescued... looks like the Europeans have a few years worth of problems of their own (many caused by us) Stocks Plunge in Europe as BMW, Ryanair Forecasts Hurt Carmakers, Airlines http://www.bloomberg.com/apps/news?pid=20601087&sid=aOgcx1010njw&refer=home By Sarah Jones Aug. 2 (Bloomberg) -- European stocks fell for the first week in three as forecasts from... [more]

In case anyone was waiting to be rescued... looks like the Europeans have a few years worth of problems of their own (many caused by us) Stocks Plunge in Europe as BMW, Ryanair Forecasts Hurt Carmakers, Airlines http://www.bloomberg.com/apps/news?pid=20601087&sid=aOgcx1010njw&refer=home By Sarah Jones Aug. 2 (Bloomberg) -- European stocks fell for the first week in three as forecasts from Bayerische Motoren Werke AG and Ryanair Holdings Plc sent carmakers and travel companies lower and crude oil prices climbed. BMW, the world's largest maker of luxury cars, fell to the lowest since 2003. Ryanair posted its steepest weekly drop in 4 1/2 years. Michelin & Cie. retreated after the tiremaker cut its full-year target. BT Group Plc tumbled as the phone company reported its fourth straight quarterly profit decline. Europe's Dow Jones Stoxx 600 Index lost 0.5 percent in this past week to 280.24. The measure has tumbled 23 percent so far in 2008 after almost $480 billion of credit losses and asset writedowns at banks prolonged the global economy's slump, inflation eroded profits and crude oil surged to a record. ``The market is bound by a lot of uncertainty,'' said Sebastian Paris-Horvitz, a strategist who helps oversee 550 billion euros ($856 billion) at Axa Investment Managers in Paris. ``There's an oil shock and there is the feeling that the economic climate in the U.S. and in Europe will deteriorate. Earnings estimates also remain too high.'' National benchmark indexes fell in 12 of the 18 western European markets in the week. France's CAC 40 decreased 1.4 percent. The U.K.'s FTSE 100 was little changed, while Germany's DAX dropped 0.6 percent. Ireland's ISEQ Index plunged 16 percent, led by Elan Corp., the nation's largest drugmaker. Crude oil rose for the first week in four, climbing 1.5 percent. At one stage it climbed above $128 a barrel after Israeli Deputy Prime Minister Shaul Mofaz said Iran is on a path toward a ``major breakthrough'' in its nuclear weapons program. BMW, Ryanair BMW plunged 11 percent, the biggest weekly decline since March 2003, after the company abandoned its profit forecast on falling U.S. sales, the dollar's decline and rising costs for plastics, steel and oil. Michelin, the world's second-largest tiremaker, retreated 14 percent. The company cut its full-year target for the second time in three months after first-half profit fell on soaring oil, steel and rubber costs and a slump in European sales. Renault SA, France's second-largest carmaker, sank 8.9 percent. Nissan Motor Co., an affiliate of Renault, posted a 43 percent drop in first-quarter profit. Ryanair led travel companies lower after Europe's biggest discount airline said profit missed analysts' estimates and it may post the first full-year loss since going public in 1997. The shares tumbled 27 percent. Deutsche Lufthansa AG, Europe's second-largest airline, lost 4.8 percent. BT Earnings BT Group retreated 14 percent, the most since July 2002, after the U.K.'s largest phone company reported lower profit and said margins at the global services unit may drop. Elan plunged 65 percent in Dublin trading after confirmation of two new cases of a deadly brain infection in patients taking its multiple sclerosis drug Tysabri. Bilfinger Berger AG led a retreat by construction companies. The shares dropped 13 percent after Germany's second-largest builder said full-year earnings will be hurt by writedowns at a Norwegian infrastructure project. Lafarge SA tumbled 8.4 percent. The world's biggest cement producer said start-up delays hurt Middle East output and energy costs rose. Spain's Iberia Lineas Aereas de Espana SA soared 19 percent. The airline announced plans to merge with British Airways Plc, Europe's third-biggest carrier, to reduce expenses as slower economies and higher fuel costs wipe out earnings. Fenosa Merger Union Fenosa SA rallied 13 percent after Gas Natural SDG SA said it will offer 16.8 billion euros ($26.2 billion) for Spain's third-largest power producer to triple its generation capacity. ArcelorMittal led a rally in basic resource companies after the world's biggest steelmaker reported second-quarter profit of $5.84 billion, exceeding analyst estimates. The shares climbed 11 percent. Eurasian Natural Resources Corp., the world's third-largest ferrochrome producer, soared 20 percent as Kazakhmys Plc, Kazakhstan's biggest copper producer, completed its acquisition of a 7.7 percent stake from the government. Antofagasta Plc advanced 8.6 percent after the copper producer controlled by Chile's Luksic family said second-quarter output of the metal rose 12 percent. To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net. [less]