European Stocks Tumble On Unimpressive Economic Data

(RTTNews) - European stocks were hammered Tuesday amid speculation that recent stimulus measures may be insufficient to stop the euro zone's economic malaise.

European Central Bank President Mario Draghi acknowledged yesterday that the ECB may need to do more given "downside risks to economic growth."

Still, markets remain unconvinced that the ECB is resolved to combat deflation with swift and decisive support, as reflected in the euro's rebound versus the dollar today.

The Euro Stoxx 50 index of eurozone bluechip stocks fell 1.58 percent to 3,205.93.

The German DAX slipped 1.58 percent, the French CAC 40 dropped 1.87 percent and the FTSE 100 index of the U.K. lost 1.44 percent.

Automakers were among the hardest hit today, with BWM, Daimler and Volkswagen all in the red. Tire maker Continental shares tumbled more than 4 percent.

Siemens lost 1.6 percent. Barclays reduced the conglomerate to "Equalweight" from "Overweight."

Merrill Lynch raised RWE to "Buy" from "Neutral." The stock was down slightly.

Dutch consumer electronics firm Koninklijke Philips Electronics NV is splitting off its lighting unit. Shares were up 3.7 percent in Amsterdam.

Norwegian chemical company Yara International ASA said Tuesday that it is discussing a merger with U.S. fertilizer producer CF Industries. Yara was up nearly 4 percent.

German prosecutors pressed charges against Deutsche Bank co-Chief Executive Jürgen Fitschen for failing to correct false statements from the company's board members in hearings connected to a legal dispute. DB shares were down 1 percent.

In London, Tate & Lyle plummeted more than 16 percent. The firm said its profit for the first half would be impacted by significant disruption to its supply chain and increasing competitive market for Splenda Sucralose.

The U.S. Treasury Department announced measures that would make it difficult for US-based companies to shift their tax base abroad, through tax inversion. Pharma stocks retreated on the news, fearing that their appeal as take-over targets may reduce.

Shire, which has agreed to be acquired by AbbVie Inc., fell 2.5 percent and AstraZeneca, for which Pfizer had made a failed bid, declined 3.6 percent.

Drug maker Roche plans to float bonds worth $5.75 billion in order to partially fund its acquisition of Intermune. Roche lost 0.35 percent.

On the economic front, the German private sector stretched its expansion to 17 months in September, flash data from Markit Economics revealed. The composite output index rose to 54 in September from 53.7 in August. However, the gap between manufacturing and services widened further in September.

Eurozone business activity grew at the lowest rate seen so far this year in September, preliminary data from Markit Economics showed. The composite output index fell to 52.3 in September, a 9-month low, from 52.5 in August, while it was expected to remain unchanged at 52.5.

Meanwhile, French business climate weakened slightly in September, survey results from the statistical office Insee showed. The business confidence index came in at 91 in September, down from 92 in August. The economy stalled again in the second quarter as initially estimated, another report revealed.

The HSBC's flash manufacturing purchasing managers' index rose to 50.5 from a final reading of 50.2 in August even as factory employment slumped to a five-and-a-half-year low. Commodities such as copper and crude are rebounding from recent losses marred by speculation that China will accept slower growth.