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European markets fall on skepticism about U.S. financial plan - European commentary

The European markets fell for the first time in three days on Tuesday, as investors turned skeptical about the U.S. government's latest bank bailout plan.

The U.S. Treasury Department unveiled a revamped financial rescue plan to cleanse up to $500 billion in spoiled assets from banks' books and support $1 trillion in new lending through an expanded Federal Reserve program.

Investors were disappointed, as they had been looking forward for a long time on clear and definite steps from policy makers on how to clean up these toxic assets.

Negotiations on a final U.S. economic stimulus package could stretch into the middle of next week as lawmakers try to work out differences between bills from the Senate and House of Representatives.

Crude for March delivery fell $0.51 to $39.05 a barrel on the New York Mercantile Exchange, by the time the European markets closed, after U.S. Treasury Secretary Timothy Geithner unveiled the rescue plan.

The FTSEurofirst 300 index of pan-European blue chips closed 2.91% lower at 805.94 points, while the narrower DJ Stoxx 50 index fell 2.65% to 1,991.07 points.

Around Europe, the U.K.'s FTSE 100 index fell 2.19% to 4,213.08, while France's CAC 40 index dropped 3.64% to 3,020.75 and Germany's DAX index slipped 3.46% to 4,505.54.

Mining stocks slipped after copper prices slid. BHP Billiton, the world's biggest miner, dipped 4.9%, while Anglo American, the second biggest, dropped 6.1% and copper miner Antofagasta fell 4%.

Similarly, energy stocks fell after crude oil prices declined. BP, Europe's biggest oil company, slid 1.7%, while Royal/Dutch Shell, the second biggest, dropped 2% and Total, the third biggest, sank 3.6%.

Shares of some banks also fell due to uncertainty about the U.S. government's latest bank bailout plan. HSBC, Europe's largest bank, lost 3.3%, while Banco Santander, Spain's largest bank, declined 3.1% and Societe Generale, France's second largest bank, dropped 6.7%. Asia focused bank Standard Chartered slipped 5.4%.

Shares of companies that generate a substantial portion of their revenues in the U.S. fell. Daimler, the world's second largest maker of luxury cars, dropped 6.8% and Dassault Systemes, a French software maker, slipped 3.1%.

On the other hand, Swiss bank UBS rose 5.7% despite reporting a forecast-missing 8.1 billion Swiss franc fourth quarter net loss, as the company reported an encouraging start to the year, with net new money inflows in wealth management and asset management in January.

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