By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- Europe's benchmark stock index moved
lower on Thursday, breaking the longest winning streak of the year,
as investors digested the latest round of earnings reports and
disappointing data from the U.S.
The Stoxx Europe 600 index dropped 0.2% to end at 331.48, after
closing higher for a sixth-straight day on Wednesday.
With a busy day on the earnings front, several prominent firms
helped push the pan-European benchmark lower after reporting
results. Shares of BNP Paribas SA fell 2.6% after the French bank
said it was hit by a $1.1 billion legal provision, pushing
fourth-quarter profit down 76%.
Shares of Lloyds Banking Group PLC (LYG) lost 2.7% after the
U.K. bank posted a full-year loss as provisions for mis-selling
payment-protection insurance continued to weigh on its bottom
line.
Shares of Rolls-Royce Holdings PLC slumped 14% in London after
the aerospace and defense company warned that it expects no revenue
growth in 2014 for the first time in 10 years. For 2013, the
company reported a 41% drop in profit.
FLSmidth & Co. AS slid 7.2% after the Danish engineering
firm said it swung to a loss in the fourth quarter and cut its
dividend.
The broader losses in Europe came after a solid winning streak,
spurred by dovish comments from U.S. Federal Reserve Chairwoman
Janet Yellen and by reassurance from European Central Bank
President Mario Draghi that the bank stands ready to ease policy
further if needed.
On Wednesday, Bank of England Governor Mark Carney was in the
spotlight after the U.K. central bank updated its forward-guidance
framework and indicated interest rates could rise in 2015, rather
than in 2016 as earlier estimated. Read: Forward Guidance 2.0: Is
Carney just digging with a larger shovel?
U.S. Fed chief Yellen was also supposed to testify before
Congress on Thursday, but the meeting was postponed due to a
snowstorm expected to hit Washington.
Instead, investors focused on the latest round of data out of
the U.S. The Commerce Department said retail sales fell 0.4% in
January, marking a bigger slide than the 0.1% drop expected by
economists polled by MarketWatch.
Meanwhile, initial jobless claims unexpectedly rose by 8,000
last week to 339,000. U.S. stocks traded higher on Wall Street.
Allan von Mehren, chief analyst at Danske Bank, said the weak
data increase the uncertainty about the economic recovery in the
U.S., but won't be enough to deter the Federal Reserve from
tapering further.
"However, if we see more months of this kind of data the Fed
will likely step to the sideline and halt the tapering process," he
said in a note.
In Europe, Italian politics were in focus. Matteo Renzi, the
leader of Italy's largest political party, withdrew support for
Prime Minister Enrico Letta on Thursday, calling for a new
government, according to news reports. Renzi has expressed
frustration with what he's called the slow pace of fiscal reforms
and told a meeting of the center-left Democratic Party in Rome that
the country needs "a new phase with a new government backed by the
same coalition forces," The Wall Street Journal reported.
The FTSE MIB index trimmed earlier losses and closed 0.2% lower
at 20,110.30.
In the rest Europe, indexes were mixed. The U.K.'s FTSE 100
index dropped 0.2% to 6,659.42, while France's CAC 40 index gained
0.2% to 4,312.80, and Germany's DAX 30 index climbed 0.6% to
9,596.77.
Tate & Lyle PLC slid 16% in London after the food-ingredient
firm lowered its guidance for fiscal 2014.
On a more upbeat note, shares of Renault SA gained 5.6% after
the French car maker set targets for boosting revenue and
profitability by 2017.
And in Germany, Commerzbank AG helped lift the benchmark index,
up 1.5%, after the bank said it swung to profit in the fourth
quarter.
Nestle SA (NSRGY) fell 1.5% after the food company reported its
slowest sales growth in four years and missed profit expectations
for 2013.
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