Trouble for EMP (Ericsson)

It seems that they are in trouble! Ericsson AB lost 24% of it’s value in Sweden yesterday!

 

European stocks fall further, hit by Ericsson, banks

 

LONDON, Oct 16 - European shares hit their lowest levels in eight sessions on Tuesday as a profit warning from telecoms equipment maker Ericsson battered the technology sector, while banking stocks also fell.

he pan-European FTSEurofirst 300 index declined 0.7 percent to finish at 1,576.0, its lowest close since Oct 4, extending Monday's 0.9 percent fall. The index is still up 6 percent so far this year.

Ericsson tumbled nearly 24 percent while Nokia and Philips also declined.

"I think it's a major disaster and unfortunately it's more than a Q3 issue," said Thomas Langer, analyst at WestLB, which cut its rating on Ericsson shares to a "reduce" from "buy".

This week's losses in European stocks came after equities rose for nearly three weeks and recovered from worries linked to problems in the credit markets and risky U.S. mortgages.

"We remain overweight, though with a slightly reduced exposure, reflecting the short term threat of some market pullback given the very strong performance of recent weeks," Philipp Vorndran, a senior investment strategist at the asset management division of Credit Suisse said in a note.

"Looking ahead to the medium to longer-term, we remain convinced that equities are the best way to participate in capital market growth and we would use any setback as a buying opportunity to add to our favoured positions," he said.

Within equity markets we continue to favour emerging markets, despite what are starting to look like stretched valuations."

U.S. stocks were lower towards the close of European trading hours on disappointing corporate earnings and rising oil prices.

OIL AT NEW RECORD

Among gainers, BP , Total and Royal Dutch Shell all rose as U.S. crude oil hit a new record on tight supplies.

Oil prices jumped 3 percent to nearly $88 a barrel, setting a new record and extending a rally that has added about eight dollars a barrel in a week on tight supplies, strong demand and tension in northern Iraq.

Oil has set a series of records over the past three days.

Among losers, Royal Bank of Scotland , BNP Paribas and Barclays and other banks all fell on persistent concerns about the fallout from the squeeze in credit markets.

Around European markets, Germany's DAX index <.GDAXI> eased 0.1 percent, UK's FTSE 100 index <.FTSE> lost 0.5 percent and France's CAC 40 <.FCHI> shed 0.6 percent.

Swiss drugs maker Roche fell 2.9 percent after the company missed forecasts on lower orders of influenza drug Tamiflu, even though it confirmed its full-year outlook.