2-4-14 11:59 AM EST | Email Article
 

By Barbara Kollmeyer, MarketWatch

 

MADRID (MarketWatch) -- A positive start for Wall Street on Tuesday helped lift European stocks out of deeper losses that had been plaguing bourses earlier, though investors still struggled against an uphill battle of dented confidence and worries about global growth.

 

Earnings news drove shares of UBS AG, but weighed on ARM Holdings PLC.

 

Logging its third straight losing session, the Stoxx Europe 600 index closed 0.2% lower at 317.58. The index is nearly 6% off its 52-week high of 337.65 on Jan. 21, so not yet in a technical correction like what has been seen in Hong Kong and Tokyo's major markets. A technical correction occurs when an index is 10% off a recent high.

 

Banks and financials pitched in on the upside to help European markets shake off the worst of earlier losses. UBS (UBS) jumped 5.4% after the heavyweight Swiss bank returned to a profit in the fourth quarter following a sizable year-earlier loss.

 

Among other heavyweight banks, shares of BBVA SA (BBVA) rose 1.1% and BNP Paribas SA gained 1.9%.

 

Premier Oil PLC was also near the top with an 8.6% gain after the company said Chief Executive Officer Simon Lockett will step down. He will stay in the role until a successor has been announced.

 

The top Stoxx 600 loser was ARM Holdings PLC (ARMHY) , which lost 5.9% after the U.K. microchip designer swung to a loss on higher operating costs. However, the company said it has a strong order backlog and posted higher revenue, lifted by global smartphone demand.

 

Wall Street traded higher after heavy selling on Monday. Asia was unable to escape that pain with the Hang Seng Index dropping 2.9% and officially entering a technically correction, joining the Nikkei 225 index , which dropped 4.2% on Tuesday.

 

Rebecca O'Keeffe, head of investment at Interactive Investor, said in a note that investors are struggling at a major crossroads and opting for the bearish path as worries about the effects of Federal Reserve tapering, a spate of weak data and rising concerns about China and other emerging markets.

 

"With investors increasingly wary about whether this is the start of a prolonged bear market rather than just a correction, bargain hunters are in short supply, and with demand waning, the only way for markets is down," said O'Keeffe.

 

Yves Lamoureux, president of Lamoureux & Co., said they are suggesting that their clients completely exit Europe markets. "We have been super bullish and our money managers have earned over 25% on a standard portfolio," he said in emailed comments. However, this year they have entered a period where tapering is "forcing players to readjust positions and that means in a way that tapering is effectively a raise in interest rates."

 

The worst losses were seen in Germany, where the DAX 30 fell 0.6% to 9,127.91, with Bayer AG off 1.3% and Volkswagen AG down 1.1%. Auto stocks were harder hit earlier on in the wake of downbeat U.S. auto sales figures on Monday.

 

Shares of Munich Re AG fell 1.1%. The German reinsurer posted a big rise in fourth-quarter profit, which helped it beat its full-year target and lift its 2013 dividend. However, the company also said rates for contracts due for renewal Jan. 1 fell 1.5% on average, with price pressure not seen letting up at the next dates in April and July.

 

The DAX is one market in Europe that could enter a technical correction first. The index is 6.8% off its 52-week high of 9,794.05 reached on Jan. 21.

 

The French CAC 40 index rose 0.2% to 4,117.45, with banks pushing higher. Soci��t�� G��n��rale SA added 3% and Credit Agricole SA gained 2.6%.

 

The FTSE 100 index eased 0.3% to 6,449.27, with a 1.6% drop for Vodafone Group PLC weighing on the downside.

 

More must-reads from MarketWatch:

 

Microsoft names Satya Nadella as next CEO

 

Kellner: The buck drops here

 

Arends: 8 cheapest stock markets in the world

-Barbara Kollmeyer; 415-439-6400; AskNewswires@dowjones.com

 

Subscribe to WSJ: http://online.wsj.com?mod=djnwires


(END) Dow Jones Newswires

02-04-14 1159ET

Copyright (c) 2014 Dow Jones & Company, Inc.
Copyright 2014 MarketWatch
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Morningstar - 2014/2/4 - UPDATE: European stocks struggle amid global uncertainty
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