FRANKFURT -- European stock markets remained heavy and volatile, burdened by rising bond yields and fear of a tumble on Wall Street.
Major indices slipped sharply in the early afternoon after mild losses this morning. The
broke a key support level.
"It feels like the beginning of some bad times," said Gary Dugan, a European equities strategist at
Indices had bounced back a bit from the early afternoon plunge. In Frankfurt, the
was down 109 points, or 2.2%, at 4942, while in London the
was down 30 at 5804 and in Paris the
was down 55, or 1.3%, at 4098.
Stocks today also were being undermined by strength in the euro, which is not good for European exporters. The euro was last bid at $1.1334, up from yesterday's low around $1.1214.
The focus is now on Wall Street, which some think is highly vulnerable to a swift move down.
futures were extremely volatile, down 3.90 points at 1243.30. The U.S. long bond was yielding 5.33%.
Marcel Mussler, technical analyst at
Oliver Klemm Wertpapierhandels
in Frankfurt, said the break below Dax 4980 indicates a bleak outlook for stocks. He sees minor support at 4880 and 4770, but said: "You can believe it or not, but the next major support is 4420."
The Dax could be saved from a rendezvous with 4420 if it is able to claw back and close today above 4980, he said. But he thinks investors still holding painful long positions should not be expecting such a miracle. "The chances of the Dax closing above 4980 appear very small," he said.
Movement today in
was a good reflection of underlying tension in the broad market. The bank jumped as high as up 2.6% after reporting better-than-expected earnings. But rather jumping aboard for a ride higher, investors swatted the stock down by taking profits. Commerzbank was last down 1.2%.
was down 2.5%,
Oil shares also were hit, with
2.1%. And German engineering firm
was down 7.2%, erasing more than half of yesterday's 13.2% gain on better-than-expected results.
rose 2.6% on reports it would a sell two units in order to focus more on drugs. SmithKline will sell
Diversified Pharmaceutical Services
for $700 million in cash and its U.S. laboratory testing unit to
for $1.27 billion.