By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets fell from a
six-year closing high on Tuesday, with mining firms sliding as
metals prices weakened, and as Vivendi and Fresenius dropped after
earnings reports.
The Stoxx Europe 600 index lost 0.3% to 337.32 after closing at
the highest level since January 2008 on Monday. The upbeat moves on
Monday came as U.S. stocks opened with solid gains, boosted by
M&A activity and bets that the S&P 500's venture into new
high ground could spur further buying.
Several prominent companies weighed on the pan-European index
after reporting earnings on Tuesday. Shares of Fresenius SE &
Co. KGaA slid 9.5% after the health-care firm laid out its 2014
outlook, which was markedly below market forecasts.
Shares of Vivendi SA dropped 4.7% after the French telecoms and
media firm said sales continued to suffer at the group's French
phone business, SFR, last year.
Mining firms also added pressure as metals prices declined.
Shares of Rio Tinto PLC (RIO) dropped 3%, BHP Billiton PLC (BHP)
fell 1.8%, and Glencore Xstrata PLC (GLCNF) erased 1.6%.
HSBC Holdings PLC (HSBC) dropped 1.1% after Citigroup cut the
heavyweight bank to neutral from buy following the company's
disappointing earnings report out on Monday.
On a more upbeat note, shares of Jyske Bank AS rallied 7.5%
after the Danish bank said late Monday it has agreed to merge with
unlisted mortgage-credit institution BRFkredit.
In data news in Europe, the second print on German gross
domestic product released Tuesday showed the economy expanded by
0.4% in the fourth quarter, in line with analyst expectations and
the preliminary estimate.
In France, a report Tuesday from statistics bureau Insee showed
business confidence remained steady in February, at the same level
recorded in the two previous months. Business confidence for
Germany brightened for a fourth straight month in February, data
showed on Monday.
The most anticipated data release this week is the euro-zone
report on consumer prices out on Friday, which could add more
pressure on the European Central Bank to ease policy further at its
meeting on March 6. Some analysts expect annual inflation dropped
to 0.6% in February, highlighting concerns that the region may be
heading for deflation.
Former European Central Bank President Jean-Claude Trichet said
on Monday that deflation is a "potential new challenge" for Europe,
with the real threat looming if inflation expectations become
un-anchored. He stressed, however, that Europe seems to have
well-anchored expectations, but "that does not mean that you do not
have to be very careful permanently."
Later on Tuesday, attention turns to the U.S., where data on
December home prices are due, along with consumer-confidence
numbers. U.S. stock futures signaled a lower open on Wall
Street.
Among country-specific indexes in Europe, the U.K.'s FTSE 100
index lost 0.6% to 6,823.64, after closing at its highest level
since 1999 on Monday.
Germany's DAX 30 index fell 0.5% to 9,664.99, and France's CAC
40 index gave up 0.5% to 4,398.59.
BASF SE dropped 1.7% in Frankfurt after the chemicals firm said
it expects earnings to increase only slightly this year as it faces
a patchy economic recovery.
Outside the main indexes, shares of Ashmore Group PLC slid 7.5%
after the emerging-markets asset manager reported a drop in fiscal
half-year earnings.
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