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Euro stocks lower on bank capital troubles; DAX down 0.25%

Stock MarketsJan 05, 2012 12:35PM ET
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Investing.com -  European stocks closed lower for the second day Thursday, as concerns over banks needing to raise more capital than forecasted muted bullish U.S. employment numbers.  

After the close of European trade, the EURO STOXX 50 gave back 1.45%, France's CAC 40 fell 1.53%, while Germany's DAX 30 closed lower by 0.25%. Meanwhile, in the U.K. the FTSE 100 dropped 0.78%.  

The bearish sentiment started when Italy's UniCredit stated it will sell shares at EUR1.943 to raise EUR7.5 billion. This is at a 43% discount to yesterday's closing price, excluding the rights value, sending shares in the bank to a 19 year low.  

UniCredit's CEO Fredrico Ghizzoni increased the bearish sentiment when he stated the debt crisis is worsening and he expects other banks to follow UniCredit's lead.  

Societe General added to the worries after giving back 5.4% on a staff cutting announcement.  

In the U.S., private employers increased jobs by 325,000, the largest increase in records going back to 2001, however the bullish sentiment was not enough to counteract the bank worries.  

A lackluster German bond auction yesterday and Greece stating that deeper income cuts are the only way to avert an economic collapse that may arrive as soon as March sent economic fear to fevered levels.   

Banks led the decline with Banco Santander falling 4.5% and Banco Bilbao Vizacaya Argentaria giving back 5%.  

Meanwhile, in bullish news, Nokia Oyj advanced 7.1% after Credit Suisse increased its rating from "underperform" to "overperform".  

U.S. stocks traded mixed across the board in midday trading with the Dow Jones Industrial Average slipping 0.35%, the S&P 500 giving back 0.17% and the Nasdaq 100 advancing 0.20%.  

Investors are awaiting U.S. Non Farm Payroll figures and retail sales numbers out of the euro zone Friday.






Euro stocks lower on bank capital troubles; DAX down 0.25%
 

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