Bank of England, European Central Bank rate decisions on tap
By Sarah Turner, MarketWatch
The percentage drop in Unilever's profit was misstated.
LONDON (MarketWatch) -- European shares Thursday resumed a downward trend from the previous session, as worries about the debt levels of Greece and Portugal refused to go away.
The pan-European Dow Jones Stoxx 600 index (ST:SXXP 247.62, -1.78, -0.71%) fell 0.8% to 247.45, unable to hold early gains and extending a loss made Wednesday. It's the second loss in five trading days for the index.
The losses came as credit-default swaps on Portugal rose over the 200 level for the first time, extending a drop from Wednesday when Portugal's finance ministry cut the volume on its T-bill auction to 300 million euros from 500 million euros.
Banco Comercial Portugues (PT:BCP 0.73, -0.05, -6.07%) dropped 5.6% and Banco Espiritio Santo (PT:BES 3.80, -0.20, -5.03%) fell 5%, with both also seeing their CDS levels deteriorate.
Shares of the euro zone's largest bank, Banco Santander (ES:SAN 9.92, -0.29, -2.84%) (STD 14.18, -0.78, -5.21%) were down 4.2%, extending a drop made on Wednesday amid worries about Spain's health.
Net profit for the fourth quarter rose 13% to 2.2 billion euros ($3 billion), just beating analyst forecasts. The bank said non-performing loans rose to 3.24% in December, against 3.03% in September. Read more on Santander.
The euro (CUR_EURUSD 1.38, -0.01, -0.40%) was lower on Thursday, down 0.4% at $1.3832 against the dollar. The European Central Bank is set to announce its latest decision on interest rates, as is the Bank of England, with the latter possibly putting an end to its 200 billion pound bond buying program. See preview
Overall, the German DAX index (DX:DAX 5,641, -31.50, -0.56%) declined 0.7% to 5,634.74, the French CAC-40 index (FR:PX1 3,770, -23.95, -0.63%) lost 0.7% to 3,767.30 and the U.K. FTSE 100 index (UK:UKX 5,221, -32.61, -0.62%) fell 0.7% to 5,214.31.
Asian stocks were mixed while futures on the Dow Jones Industrial Average fell 65 points.
On the earnings front, Royal Dutch Shell (UK:RDSA 1,750, -26.00, -1.46%) (RDS.A 56.73, -0.53, -0.93%) shares fell 1.5%, as the company's adjusted profit lagged estimates due to its loss-making refinery division. See Shell story.
Its fourth-quarter net attributable profit decreased 27%, though volumes improved 5%.
"We expect continued pressure on consumer spending power and heightened levels of competitive activity in 2010," the firm said. See Unilever story.
Shares of Deutsche Bank (DE:DBK 45.32, -0.81, -1.75%) were down 1.1%.
Fourth-quarter net profit jumped to 1.3 billion euros ($1.8 billion), exceeding analyst expectations. Last year, the firm posted a loss of 4.8 billion euros. See Deutsche Bank story.
Still, Vodafone Group (UK:VOD 140.15, +5.40, +4.01%) (VOD 21.66, -0.23, -1.05%) shares were up 4.1%.
Its fiscal third-quarter revenue rose 10.3% to 11.55 billion pounds as the group tightened up its adjusted operating profit forecast for fiscal 2010 and raised its free cash flow forecast for the year.
