European Closing Update: Markets Lower on Dell, U.S. Elections

LONDON -- The prolonged agony of the U.S. presidential election acted like a Chinese water torture, each drip dissolving market optimism and forcing the markets lower. Technology stocks fared even worse after Dell Computer (DELL) said that revenue growth will slow next year.

In the U.K., retailers staged an impressive rally that saved the FTSE 100's blushes, but the index still closed 42 points lower, or 0.7%, at 6400. The Techmark 100 closed down 124 points, or 3.7%, at 3222.

Bookham Technology (BKHM) was hammered again. After Wednesday's earnings, analysts raised a number of reservations, not least of which is its dependence on main customer Nortel Networks(NT). The shares continued their recent precipitous slide to close 14.6%, or 266p, lower at 15.60 ($22.31). The shares have fallen more than 37% in two days and it could presage a drop to a level near its flotation price of 10.00.

Internet security firm Baltimore Technologies (BALT) fell to 460p, a loss of 25p or 5.2% and Marconi (MONI) ended the week battered and bruised, 26p lower, or 3.1%, at 810.

By contrast, retailers stood conspicuously aloof from the general market fall. Drugstore chain Boots continued to rise after Thursday's inclusion by Goldman Sachs on its list of defensive stocks. The shares eventually closed 45p higher, or 8.5%, at 575.

Also on a positive note, EMI(EMIPY) tenaciously held on to earlier gains after the company confirmed the worst-kept secret in the market: that it had been approached by Germany's Bertelsmann about a possible tie-up. Investors were encouraged by the prospect of the two companies making beautiful music together and the shares closed 27.5p higher, or 5.1%, at 571.5.

However, the rest of media sector was hurt by Disney's(DIS) warning of a slowdown in advertising revenue. Magazine publisher Emap closed 53p lower, or 6.0%, at 830, while Reuters (RTRSY) finished 16p down, or 1.3%, at 12.64.

Finally, British Telecom (BTY) continued to be sold off as the investment community decided its restructuring, announced Thursday, was too little too late. BT closed 49p lower, or 6.5%, at 700p. Other telcos also looked worse for wear ahead of their interims next week. Vodafone (VOD), which reports Tuesday, ended 2.1% lower at 245p.

Europe's other stock markets ended the week even further in the red than London, as the CAC-40 in Paris closed down 123.7 points, or 2%, at 6147.5 and the Xetra Dax in Frankfurt was off 110.8, or 1.6%, to 6848.7 late in German trading. The Neuer Markt's tech-heavy Nemax 50 index was down 123.9, or 3%, to 4046.1.

Weak tech shares lead the way lower, as STMicroelectronics (STM) closed down 2.50 euros, or 4.8%, to 49.50 ($42.87), Infineon (IFX) fell 3.11 euros, or 6.6%, to 43.90 and software maker SAP (SAP) dropped 13.55 euros, or 6.1%, to 210.17.

Ahead of the Swiss UMTS auction starting Monday, shares of telcos -- even those not participating -- moved lower. France Telecom (FTE) closed down 5.30 euros, or 4.7%, at 108.00, Deutsche Telekom (DT) fell 0.98 euro, or 2.4%, to 39.20 euros and Telefonica (TEF) dropped 0.85 euro, or 3.9%, to 20.70.

Some Old Economy stocks continued to offer a little relief from all the red numbers, as German utility E.ON (EON) was up 0.51 euro, or 0.8%, to 64.01 and Volkswagen (VLKAY) rose 0.15 euro, or 0.3%, to 58.05.

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