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European Markets Finished Lower With Weakness In Bank Stocks

4/3/2012 11:58 AM ET

The European markets closed to the downside on Tuesday after a choppy day of trading. There was a lack of any significant news today to give the markets a clear direction. Investors may be reluctant to take a position ahead of the Easter holiday on Friday. The U.S. employment situation is scheduled to be released on Friday, despite the closure of stock markets for the holiday. Banks stocks were a source of weakness Tuesday, but pharmaceutical stocks performed well. The situation in Spain weighed on investors today, largely due to deficit concerns. Spanish public debt is expected to reach 78.9 percent of GDP in 2012.

Spain's unemployment increased again in March, data from the Labor Ministry showed Tuesday. The number of unemployed increased by 38,769 or 0.82 percent in March from the prior month. The registered unemployment totaled 4.75 million. In February, unemployment rose by 112,269.

The British Chambers of Commerce said Tuesday that the economy is showing signs of improvement and may avoid a recession. Still, economic growth remains "weak," the industry group said. The BCC expects the economy to expand 0.3 percent in the first quarter of 2012, after suffering a 0.3 percent contraction in the fourth quarter.

China's non-manufacturing sector expanded in March, according to a report published by the China Federation of Logistics and Purchasing (CFLP) on Tuesday. The purchasing managers' index for the service sector rose to 58 in March. CFLP last month reported the February reading as 48.4.

The Euro Stoxx 50 index of eurozone bluechip stocks fell by 1.60 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, finished lower by 1.07 percent.

The DAX of Germany closed down by 1.05 percent Tuesday and the CAC 40 of France dropped by 1.62 percent. The FTSE 100 of the U.K. decreased by 0.62 percent and the SMI of Switzerland finished lower by 0.65 percent.

In Frankfurt, Bayer finished higher by 0.30 percent. Bayer HealthCare said its late stage study of regorafenib met its primary goal of statistically significant improvement of progression-free survival in patients with metastatic and unresectable gastrointestinal stromal tumors.

K+S fell by 1.41 percent, after Nomura downgraded its rating on the stock to "Reduce" from "Neutral."

Morgan Stanley lowered its rating on Deutsche Post to "Equalweight" from "Overweight." The stock fell by 1.69 percent.

Zooplus declined by 6.99 percent. The stock was downgraded to "Hold" from "Buy" at Berenberg.

In London, Cairn Energy climbed by 4.18 percent. The company is acquiring Agora Oil & Gas AS, a private Norwegian company with development assets in the UK and Norwegian North Sea, in a cash and stock deal valued at $450 million.

GlaxoSmithKline finished down by 0.07 percent. The company announced topline results from seven of the eight 'Harmony' Phase III studies investigating the use of albiglutide in type 2 diabetes. The data support progression towards regulatory filings.

British Sky Broadcasting fell by 0.81 percent, after Chairman James Murdoch announced that he was stepping down from his position at the company.

Compass Group declined by 2.09 percent, after Morgan Stanley downgraded the stock to "Equal weight" from "Overweight."

Bunzl fell by 0.68 percent, after it was downgraded to "Underperform" from "Neutral." AstraZeneca increased by 0.14 percent, after announcing an agreement with Amgen to jointly develop and commercialize five monoclonal antibodies from Amgen's clinical inflammation portfolio.

Aberdeen Asset Management rose by 4.21 percent. Morgan Stanley reportedly reiterated its rating on the stock and increased its price target.

Shares of Old Mutual declined by 1.78 percent. Credit Suisse downgraded its rating on the stock to "Neutral" from "Outperform."

In Zurich, Lonza climbed by 1.61 percent. The company elected Richard Ridinger as its new chief executive officer, effective May 1.

Eurozone factory gate inflation slowed less than expected in February due to rising oil prices. Producer price inflation moderated to 3.6 percent year-on-year in February from a revised 3.8 percent in January, Eurostat said Tuesday. Nonetheless, it stayed above the consensus forecast of 3.5 percent. On a monthly basis, the industrial producer price index climbed 0.6 percent, following a 0.8 percent gain in January. Economists had expected an increase of 0.5 percent.

The construction sector in the United Kingdom expanded at the fastest pace in twenty-one months in March as new orders increased significantly, and companies became more optimistic about the outlook. A survey by Markit Economics and the Chartered Institute of Purchasing and Supply (CIPS) Tuesday showed that the seasonally adjusted purchasing managers' index for the construction sector rose to 56.7 in March from 54.3 in February.

U.S. factory orders rebounded in February following disappointing January statistics, according to figures released Tuesday by the Commerce Department. Commerce Department figures put the February estimate of new orders for manufactured goods at $468.4 billion, a 1.3 percent increase from January levels. While most economists had predicted a rebound following the 1.1 percent decline in January, many had hoped for a slightly more robust 1.5 percent increase.

by RTT Staff Writer

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