By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- European markets fell sharply Friday,
cementing weekly losses as investors backtracked from global stocks
on valuation concerns.
The Stoxx Europe 600 fell 1.4% to 328.77, and ended lower by
3.1% for the week, the first such decline since the week ended
March 14.
In line with much of this week's pattern, European stocks fell
in the wake of selloffs in Asia and on Wall Street. The Nikkei 225
closed down 2.4%, its lowest level this year, and the Nasdaq
Composite on Thursday tumbled 3.1%, with tech and biotech stocks
hit hard. The tech-heavy index on Friday attempted to win back some
lost ground.
Among European tech names, shares of ARM Holdings PLC slumped
4.5%, Logitech International SA gave up 3.9%, and Infineon
Technologies AG finished 2.9% lower.
The direction European equities go will be a "reflection of what
the S&P [500 index] does next," and the U.S. equity index has
"outperformed by quite some distance an awful lot of the other
European benchmarks over the past four to five years," said Michael
Hewson, market analyst at CMC Markets, in a telephone interview.
"That to me means that the scope for a correction is greater in the
S&P and there will be an inevitable spillover effect into
European markets."
Hewson said he's "not 100% convinced" that a spillover will drag
European benchmarks below their lows of this year and stoke a
sustained selloff in European equities. "But what I do think we
need to see is a shakeout in the S&P 500," he said.
The S&P 500 (SPX) saw pressure Friday coming in part from
J.P. Morgan Chase & Co. (JPM) after the bank's quarterly profit
missed analyst expectations.
Leading decliners on the Stoxx 600 were Norwegian companies Aker
Solutions ASA and Orkla ASA , falling 8% and 6.9%, respectively, as
shares of the oil and gas industry services provider and the
conglomerate each traded without dividend rights. Also hit hard,
Thales SA shares slid 3.7% after J.P. Morgan cut its rating on the
French defense-electronics group to neutral from overweight.
U.K.'s FTSE 100 fell 1.2% to 6,561.70, with only a handful of
the index's components able to advance. Shares of Wm. Morrison
Supermarkets PLC paced gainers with a 2% rise.
Germany's DAX 30 dropped 1.5% to 9,315.29, and France's CAC 40
fell 1.1% to 4,365.86.
More news from MarketWatch:
IEA trims 2014 oil-demand growth forecast
Statoil makes oil and gas discovery in North Sea
Subscribe to WSJ: http://online.wsj.com?mod=djnwires