European Stocks Down, but Not as Much as Feared

The declines were coming on light volumes.
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FRANKFURT -- Bourses slid further into negative territory on a deteriorating technical outlook and worries that Wall Street might be inclined to give an encore of Tuesday's ugly performance.

Losses across Europe have not been as deep as many had expected when they arrived at trading desks. But volumes were light, with only the bravest of investors stepping in to buy.

Tech names were among the biggest losers after Tuesday's 3.9% breakdown in the

Nasdaq

and after some disturbing earnings news. U.K. hand-held computer maker

Psion

dropped 10.8% after a profit warning. And Swedish mobile telephone company

Ericsson

(ERICY)

fell 4.1% after a company official reportedly said telecommunications prices were coming under increasing pressure.

Other tech losers included

Philips

, down 4.1%,

SAP

(SAP) - Get Report

, down 3.0%, and

Nokia

(NOKA)

, down 3.2%.

In Frankfurt, the

Xetra Dax

was down 77 points, or 1.6%, at 4772; in London the

FTSE-100

was down 45, or 0.8%, at 5734; and in Paris the

CAC-40

was down 51, or 1.3%, at 3986.

Indices were able to bounce off modestly off lows this morning. But they slipped again early this afternoon and were cowering near session lows ahead of Wall Street's opening bell.

S&P 500

futures were up 0.10 point at 1219.10, while the U.S. long bond was yielding 5.31%. The euro was up slightly against the dollar from New York's close at $1.1331, while the dollar gained against the yen to 115.15.

Nick Glydon, technical analyst at

Robert Fleming Securities

in London, said of Euro stocks, "My gut feeling is things are looking pretty bad, that we are headed lower."

He said the European stock market was holding up fairly well mainly because Wall Street's losses Tuesday came on relatively mild volumes. "It might not have been people dumping stocks," he said. "It could have been profit-taking."

Whatever kind of selling it was, it does not change the bad technical outlook in Europe, Glydon said, adding that he would not recommend buying yet. "No. Definitely not."

The Dax is flirting with a key support level today at 4752, the 1999 low reached in mid-January, he said. But other indices also were looking shaky, as are the charts of some individual banks and other big names, he said. Those names included

Lloyds

, down 1.0% today, and

British Telecom

, down 0.9%.

Banks across Europe were generally down today. But going against the trend were French banks

Societe Generale

and

Paribas

, which have announced marriage plans. Societe Generale was up 1.9% and Paribas up 1.3% on market talk that other financial institutions were considering counterbids. The market has not been

overly pleased with the planned merger.