European Stocks Modestly Lower in Morning Trade (Bloomberg) (18-01-2008)

Jan. 18 (Bloomberg) -- European stocks dropped for a fourth day as concern regarding the possibility of a U.S. recession deepens. Nonetheless, hope for a new bid for Rio Tinto and a rescue plan being put in place to help the U.S. economy, helped stock markets in Europe avoid the steep losses seen on Wall Street overnight.

The Dow Jones Stoxx 600 Index fell 0.3 percent to 330.02 at 8:25 a.m. in London. The Stoxx 50 also lost 0.3 percent, as did the Euro Stoxx 50, a measure for the euro region.

At 8:30 GMT the U.K. FTSE 100 index was losing 0.4% to 5,878.30, the German DAX 30 index moved down 0.3% to 7,388.25, while the French CAC-40 index slipped 0.2% to 5,144.87.

Europe's Stoxx 600 has lost 4 percent so far this week, heading for its sixth consecutive weekly decline, the longest losing streak since 1998. The index is down 17.6 percent from a 6 1/2-year high on June 1.

Markets in Austria, Belgium, Denmark, Finland, Norway, Poland and Sweden have extended their declines from highs reached last year to more than 20 percent, the common definition of a bear market.

Allianz, Europe's biggest insurer, lost 1 percent to 139.95 euros. Royal Bank of Scotland, the U.K. second-biggest bank, fell 1.6 percent to 380 pence.

Societe Gιnιrale, France's third-biggest bank sank 1.6 percent to 91.5 euros. Barclays Plc, Britain's third-largest, slid 1.8 percent to 457.5 pence.

Philips declined 1.6 percent to 25.24 euros after Lehman cut the world's biggest maker of light bulbs and electric shavers to ``underweight'' from ``overweight.''

New Star Asset Management tumbled 65 pence to 82 pence. The fund company set up by John Duffield in 2000 said assets under management fell in the second half after clients withdrew funds and investment performance lagged.

Rio Tinto Group rose 4.2 percent to 4,668 pence. BHP Billiton Ltd. may bid 3.5 shares and A$16 ($14) for each Rio share. London-based Rio rejected a three-for-one stock proposal from BHP in November.

Source: Bloomberg