European Stocks Skittish on Lewinsky Effect

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FRANKFURT -- Europe remained jittery and wobbly, with most markets down on spillover from Wall Street's losses and on dollar weakness against euro currencies, which cuts into European export profits.

And in what is becoming almost an everyday occurrence, several companies were bloodied up after warning that Asia's financial woes will continue to hurt profits. One of those, French firm

Michelin

, was down 24.60 francs, or 6.9%, at 331.50. And Dutch chemical firm

Akzo Nobel

was down 11.70 guilder, or 10.4%, at 100.60 after reporting disappointing earnings.

Some traders said dollar weakness and stocks' losses stemmed in part from the uncertainty created by news of

Monica Lewinsky's

immunity deal to testify on her relationship with

President Clinton

.

Most markets early in the afternoon had edged off the session lows on cautious bargain hunting. In Frankfurt, Germany's

Xetra DAX

was down 17 points, or 0.3%, at 5849, in London the

FTSE-100

was down 5, or 0.1%, at 5830, and in Paris the

CAC-40

was up 10, or 0.3%, at 4132.

Toby Denne, head European stock trader at

Credit Lyonnais Securities

in London, said bears and bulls were fighting for dominance, albeit on light volumes. Redemptions were forcing some managers to sell stocks for cash, which Denne interpreted as a sign that bargain hunters want plenty of cash in hand if the market falls further.

"If the floodgates do open wide and this turns into a bearish swamp, investors want plenty of ammunition," he said.

S&P 500

futures held to a relatively tight range in overnight

Globex

trading, and were last up 1.90 points at 1137.40. The dollar was at 141.83 yen and 1.7729 marks, while the U.S. long bond was yielding 5.74%.

Overnight in Asia, for the second session in a row, Tokyo was nearly the only market to end higher. The

Nikkei

closed up 43 points, or 0.3%, at 16,158. Hong Kong's

Hang Seng

slid 117 points, or 1.5%, to 7808.

Among chemical firms suffering spillover from Akzo Nobel's plunge was Germany's

BASF

, down 2.50 marks, or 3.0%, at 83.00 marks.

Germany's

Lufthansa

, which receives a large share of its earnings in dollars, was a prime example of how a weak dollar can hit a European stock price. Lufthansa was last down 2.40 marks, or 4.8%, at 47.60.

In London,

British Telecom

(BTY)

, announced that first-quarter earnings fell 19%, in line with expectations. British Telecom was last down 8 pence, or 0.9%, at 877.

Other telecoms were weaker today, including the U.K.'s

Vodaphone

(

(VOD) - Get Report

VOD ADR), down 20.50 pence, or 2.4%, at 814.50, and

Deutsche Telekom

(

(DT) - Get Report

DT ADR), down 1.25 marks, or 2.4%, at 50.55. But

France Telecom

(

(FTE)

FTE ADR) was up 13.30 francs, or 3.5%, at 397.40.