By Dow Jones Business News, October 07, 2013, 11:58:00 AM EDT
By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- European stock markets pared the worst of their losses on Monday, but still ended lower as the
U.S. government shutdown entered a second week with little hope for a near-term resolution.
The Stoxx Europe 600 index fell 0.2% to close at 309.18, after earlier dropping nearly 1% and touching levels last
seen in early September.
The index closed out last week with an 0.7% loss.
Among decliners, LVMH Moet Hennessy Louis Vuitton SA fell 1.1%. In a report published Sunday, Reuters said analysts
are growing increasingly concerned about the luxury group's brands and are worried these won't be able to provide
alternative growth now that cash cow Louis Vuitton has fallen on tough times.
Shares of Burberry Group PLC fell 1.2% after Chief Executive Angela Ahrendts warned in an interview with Les Echoes
that the Chinese slowdown may be the new reality rather than a temporary lull.
A warning from Treasury Secretary Jacob Lew that Congress is "playing with fire" if it doesn't increase the debt
ceiling in time increased investors' anxiety about the U.S. budget stalemate and looming deadline to raise the country's
"The news that U.S. politicians have again put self-interest ahead of the greater good of the country by failing to
make any progress in sorting out the budget or tackling the debt ceiling will have surprised few," said Alastair McCaig,
market analyst at IG.
"The U.S. debt markets have remained calm, but the closer we get to the mid-October deadline, the less likely that is
to remain the case," he said.
One bright spot for Europe was Italy, with the FTSE MIB Italy index rising 0.7% to close at 18,425.82. Toward the
close of markets on Friday, Italian stocks rallied on news a Senate panel had voted to expel former Prime Minister
Banks in Italy were the biggest gainers in Europe, with UniCredit SpA up 2.5% and Banca Monte dei Paschi di Siena SpA
up more than 6%.
The French CAC 40 index pared a loss of around 0.7% to finish with a marginal gain at 4,165.58. Shares of European
Aeronautic Defense & Space EADS NV rose more than 2% after its Airbus SAS unit won a $9.75 billion jetliner order from
Japan Airlines Co. in Tokyo. Losses for LVMH weighed on the index.
The German DAX 30 index lost 0.4% to close at 8,591.58, weighed down by a 0.8% drop for Siemens AG ( SI ), a 1.4%
decline for Bayer AG and a 1.6% fall for Deutsche Bank AG .
Shares of SAP AG (SAP) fell 2.2% after a Reuters article said the business software group was one of a number of
companies talking to BlackBerry Ltd. (RIMM) (RIMM) about buying all or part of the struggling handset maker. SAP
declined to comment to Reuters for the article.
In London, the FTSE 100 index fell 0.3% to 6,437.28, driven by a 0.7% drop for HSBC Holdings PLC (HBC) and a 1.2%
fall for Vodafone PLC ( VOD ).
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