By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- After a four-day winning run, European
stock markets retreated on Thursday as investors digested corporate
earnings and followed the negative trading mood on Wall Street.
The Stoxx Europe 600 index slipped 0.2% to end at 333.99, after
closing at the highest level in six years on Wednesday.
"We are due for a healthy correction. Markets going down are not
necessarily a bad thing, but markets going up without a pullback
makes me nervous. Because when we do get a pullback it will be more
dramatic," said Michael Hewson, market analyst at CMC Markets.
"If the stock markets were a parameter of the overall economies
around the world, they would be a lot lower. They are not
reflecting fundamentals right now -- if they were, they would have
gone down in 2012. With so much monetary stimulus sloshing around
in the financial system, I don't know where the market is fairly
valued at," he added.
Posting one of the biggest losses in the pan-European benchmark,
shares of Premier Oil PLC dropped 6.5% after the oil exploration
and production company said output in 2013 was in the middle of its
guidance.
Shares of Associated British Foods PLC lost 2.6% after the food
and retail firm said its budget-clothing chain Primark posted
strong sales around Christmas, but that its sugar business was
weaker than expected.
Royal Ahold NV gave up 2.5% after the Dutch supermarket firm
said sales declined by 4.2% in the fourth quarter due to
foreign-exchange effects and a loss of market share in its two key
regions.
Swiss Re AG lost 1.9% after J.P. Morgan Cazenove cut the
reinsurance firm to underweight from neutral.
The country-specific indexes were mostly weaker, as investors
pulled back after solid gains earlier in the week. U.S. stocks also
traded lower after earnings disappointment from blue chips.
Additionally weekly jobless claims fell to a six-week low and
consumer-price inflation ticked higher in the U.S.
"Unemployment claims in the U.S. came in at 326,000, 1,000 lower
than forecast," said Alex Conroy, financial trader with Spreadex,
in a note. "Following last Friday's disappointing nonfarm figures,
this could rekindle speculators' fears that the Fed could speed up
the tapering process when the FOMC two-day meeting gets under way
on Jan. 28."
Germany's DAX 30 index dropped 0.2% to 9,717.71, after closing
at an all-time high on Wednesday. France's CAC 40 index fell 0.3%
to 4,319.27 and the U.K.'s FTSE 100 index slipped 0.1% to
6,815.42.
Mining firms rose in London after Citigroup moved its 12-month
stance on the sector to bullish from neutral, marking the first
upbeat call from the bank in three years. Within the industry, Citi
said it prefers BHP Billiton PLC (BHP) , up 3.8%, Rio Tinto PLC
(RIO), 2.5% higher, and Glencore Xstrata PLC (GLCNF), up 2.4%.
Metals prices were mostly higher.
United Utilities Group PLC climbed 4.6% after Morgan Stanley
lifted the firm to overweight from equal weight.
Outside the major indexes, shares of Cie. Financière Richemont
SA dropped 2% after third-quarter sales missed expectations.
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