Shawshank, VA 9/22/2011 (PennyPayDay) – The European markets are firmly in negative territory in afternoon trading Thursday, as markets across the globe reacted in panic to the comments from the U.S. Federal Reserve that raised concerns about the recovery of the world's largest economy. Asian markets plunged and U.S. index futures are lower. Carmakers, mining stocks and banks are notably lower.As expected, the Fed, at the end of its two-day meeting, Wednesday announced the replacing of short-term securities in its bond portfolio with longer-term securities. "This program should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative," the Fed said.
However, the central bank also noted that economic growth remains slow and warned that there are significant downside risks to the economic outlook.
Additionally, Moody's Investors Service downgraded long-term ratings of U.S. lenders Bank of America and Wells Fargo, while reducing the short-term ratings of Citigroup Inc., due to a decrease in the probability that the U.S. government would support the lenders, if needed.
Meanwhile, Greece has announced a fresh package of austerity measures for securing further bailout funds to weather its debt crisis that threatens the Eurozone country with default. Cutting high pensions by 20 percent in the public-sector and placing 30,000 civil servants in a "labor reserve" on road to redundancy were among the tough measures agreed at a marathon Cabinet meeting chaired by Prime Minister George Papandreou late on Wednesday.
The Euro Stoxx 50 index of eurozone bluechip stocks is retreating 4.62 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is falling 4.03 percent. The German DAX is retreating 4.34 percent and the French CAC 40 is declining 5.08 percent. The UK's FTSE 100 is falling 4.91 percent and Switzerland's SMI is contracting 2.93 percent.
Among the DAX components, BMW, Daimler and Volkswagen are declining between 6.8 percent and 6.2 percent. MAN is retreating 3.7 percent. Deutsche Bank is dropping 4.6 percent and Commerzbank is losing 4.4 percent.
Industrial conglomerate Siemens is falling 3.8 percent. Lufthansa is falling 4.3 percent. Barclays reduced its price target on the stock. Beirsdorf is down 1.4 percent after Morgan Stanley cut its price target on the stock.
ElringKlinger is dropping 4.6 percent. HSBC lowered its price target on the stock to 26 euros from 30 euros.
SolarWorld is dropping 2.4 percent. The stock's price target was reduced at Commerzbank. Fraport is declining 2.5 percent. Nomura raised its price target on the stock.
In Paris, Societe Generale is leading the decliners by retreating 8.4 percent as reports said the lender is planning to sell Newedge Group and the SGSS securities services unit. Natixis is falling 7.3 percent, Credit Agricole is declining 5.1 percent and BNP Paribas is contracting 4.4 percent. Macquarie cut Credit Agricole to "Underperfrom" from "Outperform" and reduced its price target on the stock.
Michelin is declining about 5 percent after UBS reduced its price target on the stock. Peugeot and Renault are declining 5 percent and 4.6 percent, respectively.
In London, miners fell after results of a survey by Markit Economics showed that China's manufacturing sector contracted for a third month running in September, with both production and new orders declining during the month. The flash HSBC manufacturing purchasing managers' index fell to 49.4 in September from 49.9 in August.
Anglo American, Antofagasta, BHP Billiton, Kazhakhmys, Rio Tinto, Vedanta and Xstrata are falling between 6 percent and 9.3 percent.
Lenders HSBC, Barclays, Lloyds Banking and Royal Bank of Scotland are falling from 3.6 percent to 6.9 percent. BP is dropping 5.35 percent and Royal Dutsch Shell is sliding 4 percent. Retailers are notably lower.
GlaxoSmithKline is down 1.5 percent. Goldman Sachs raised the stock to "Neutral" from "Sell" and increased the price target to 1330 pence from 1130 pence. United Utilities is losing 2.1 percent. The company said its first-half revenues increased from last year on regulated price increase and that the current trading is in line with expectations.
TUI Travel is falling 4.3 percent. The travel operator said it is on track to meet its full-year expectations. The company said its winter bookings are satisfactory overall and booked load factors are in line with its expectations.
Legal & General is down 3.8 percent. The insurer announced that its CEO Tim Breedon intends to retire at the end of 2012. easyJet today lifted its fiscal year pre-tax profit outlook and announced a special dividend. The stock is adding 7.1 percent.
Logitech is plunging 12.1 percent in Zurich after the mouse and keyboard maker once again lowered its revenue and operating income guidance for 2012. Nestle is down 1.7 percent. JPMorgan raised its rating on the stock to "Overweight" from "Neutral" and increased its price taregt on the stock.
Syngenta is falling 5.1 percent. Citigroup cut the agricultural chemicals firm to "Hold" from "Buy" and reduced its price target. Volvo is falling 4.8 percent in Stockholm. The automaker announced new financial targets for the Group beginning next year that would focus on benchmarking its operations with competitors.
Hennes & Mauritz is falling 3.2 percent. UBS raised the stock to "Neutral" from "Sell." Intesa Sanpaolo is losing 2.3 percent in Milan after Standard & Poor's cut its credit ratings for the lender.
In economic news, the German private sector growth continued to slow in September, Markit Economics said. The flash composite output index came in at 50.8, compared to 51.3 in August, the lowest since July 2009.
Meanwhile, France's private sector output growth slowed marginally in September. The flash composite output index dropped to 50.7 from 53.7 in August, again lowest level since July 2009.
Eurozone industrial new orders were down 2.1 percent month-on-month in July, data from Eurostat revealed. Economists were expecting orders to fall 1.2 percent, the same rate of fall as seen in June.
In the commodity space, crude for November delivery is sliding $3.85 to $82.07 per barrel and December gold is losing $56.3 to $1751.8 a troy ounce.
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