Technology stocks fell yesterday following the latest round of bad news from North American corporates including Nortel and Palm. In spite of many such previous profit warnings, their power to knock the stuffing out of European stocks seems to continue unabated.
Among sharp fallers, SAP was down 6 per cent, Alcatel 7 per cent and Ericsson 8 per cent. Ericsson's share price was also reacting to a statement from Mr Kurt Hellstrom, the chief executive, that growth in the US this year may be as low as zero. The shares closed at 62 Swedish krona.
Nokia, which investors had previously expected to rally because of the previous day's consumer confidence figures from the US, instead ended 2 per cent lower at €28.80. Telecoms stocks were also lower, with France Telecom off 2.6 per cent at €66.40 and Deutsche Telekom off 3.9 per cent at €27.10.
By far the worst faller was French long distance carrier Western Telecom, which resumed trade yesterday after a two-week suspension and promptly tumbled 64 per cent to a record low of 82 cents. The company recently declared itself in default with suppliers.
But the French telecoms and construction group Bouygues rose 2.2 per cent to €38.85 after good results released on Tuesday after market close. The company, which includes television unit TF1, roadbuilder Colas and oil platforms subsidiary Bouygues Offshore, posted a net profit of €215 million before exceptionals, just above consensus forecasts.
Bouygues Telecom, France's third biggest mobile operator that analysts say represents the core of the business, halved its losses last year. Bouygues said in January it was not going to apply for a French licence for third generation mobile phones, preferring to keep its debt to equity ratios low.
Shares in broadcaster TF1, a constituent of the CAC 40, rose 4.4 per cent to €41.25.
The German online broker Consors reported a net profit of €17 million, roughly in line with analysts' expectations, but added that client growth in the first quarter of this year had slowed, the third consecutive fall.
