By Blaise Robinson
PARIS, Jan 17 (Reuters) - European stocks ended lower on
Thursday, falling for the sixth time in seven sessions as weak
U.S. factory data added to recession fears, while a massive
quarterly loss at Merrill Lynch <MER.N> fuelled worries over
banks.
But dovish comments from the U.S. Federal Reserve Chairman
Ben Bernanke and a drop in U.S. weekly jobless claims helped
cushion the fall.
Energy and mining shares were among the top losers, dragged
lower by economic worries and mixed commodity prices.
Both Anglo American <AAL.L> and BHP Billiton <BLT.L> ended
down 4.1 percent, while Total <TOTF.PA> fell 1.9 percent and
Royal Dutch Shell <RDSa.L> shed 2 percent.
Drugmaker Novartis <NOVN.VX> sank 3.4 percent after saying
its quarterly profit plummeted 42 percent, falling far short of
forecasts.
The FTSEurofirst 300 <> index of top European shares
closed 0.6 percent lower at 1,374.36 points. Europe's benchmark
index has already lost 8.8 percent since the start of 2008, hit
by fears that the U.S. economy may tip into recession.
"We're at a time when the market is very focused on all the
negative data and is really not paying attention to the bright
spots," said Kate Warne, strategist at Edward Jones, in St.
Louis in the United States.
"We will continue to see worries about the health of the
U.S. economy, but it may not be in as bad a shape as some people
think."
On the upside, Scottish & Newcastle <SCTN.L> jumped 5.4
percent after rival brewers Carlsberg <CARLb.CO> and partner
Heineken <HEIN.AS> raised their takeover bid for S&N to 800
pence per share from the previous 780 pence, while S&N, which
previously refused to discuss the consortium's approach, entered
talks with the two firms.
Carlsberg dropped 4.7 percent and Heineken gained 1.8
percent.
Banks retreated, with the DJ Stoxx European index <.SPX7>
losing 0.5 percent, falling after U.S. investment bank Merrill
Lynch posted a quarterly loss of nearly $10 billion after
mortgage-related write-downs and adjustments totalling about $16
billion, sending its shares down 8 percent by midday on Wall
Street.
UBS <UBSN.VX> lost 2.7 percent, Societe Generale <SOGN.PA>
shed 2 percent and Commerzbank <CBKGn.DE> fell 3.6 percent.
"We're seeing mounting fears on how long the problems in the
credit market will last and how bad it will get, and although
some economic data such as today's factory data continue to show
that the economy is weakening, there has been some better news
on the jobs front," Warne said.
Data showed factory activity in the U.S. Mid-Atlantic region
contracted dramatically in January, fuelling concerns over the
prospect of a U.S. economic downturn. The weaker-than-expected
numbers eclipsed earlier data that showed the number of workers
filing initial claims for U.S. unemployment benefits fell
unexpectedly last week, figures that reassured investors over
the health of the labour market.
Around Europe, Germany's DAX index <> lost 0.8
percent, UK's FTSE 100 index <> dropped 0.7 percent and
France's CAC 40 <> shed 1.3 percent.
European chipmakers Infineon <IFXGn.DE> and
STMicroelectronics <STM.PA> gained 5.1 percent and 2.9 percent
respectively, bouncing back from a recent sharp fall on early
signs of a price recovery for memory chips and reports of
healthy demand for personal computers in the United States.
Recently beaten-down shares of telecom gear maker
Alcatel-Lucent <ALUA.PA> rose 2.7 percent, helped by news of a
hefty contract in Brazil.
Shares in French wines and spirits group Pernod Ricard
<PERP.PA> dropped 6.1 percent and smaller rival Remy Cointreau
<RCOP.PA> fell 11 percent, after the latter reported tepid sales
in the important pre-Christmas period.
(Editing by Erica Billingham)
