[R]1:00PM NY European markets finished weak, tracking U.S. losses.[/R]
European stocks finished notably down Tuesday amid concerns over U.S. retail sales and more subprime mortgage woes. Heavy losses for French Lagardere and SABMiller further pressured the European markets. Lagardere dropped 3.6% after the media group reported a 57% fall in 2006 net profit, hurt by the poor performance of its shareholding in aerospace and defense group EADS. Shares in U.K. brewer SABMiller lost 4.4% after the company released warning about its full-year operating profit. Swisscom, which on Monday offered to buy Italian rival FastWeb for around $4.9 billion, dropped 2.2% after reporting a 21% drop in 2006 net income. Michelin also lost 2.2% after the tire maker announced plans to issue between 610 million and 700 million euros of 10-year, zero-coupon convertible bonds. However, there were individual gainers. The U.K. Cadbury Schweppes soared 10%, following news of a 2.98% stake in the company.The German DAX 30 slipped 1.4% at 6,623.99, the French CAC 40 dropped 1.2% to 5,432.94 and the U.K. FTSE 100 fell 1.2% to 6,161.20.

Crude oil prices reversed from steep decline in the previous session. Light, sweet crude April delivery rose 75 cents $59.66. Heating oil added 4 cents to $1.7222. Natural gas rose 11 cents to $7.026 per 1,000 cubic feet. The U.S. dollar lost ground against its major currency rivals. The euro was quoted at $1.3196, up from $1.3189. The dollar bought 117.02 yen, down from 117.66. The British pound was quoted at $1.9322, up from $1.9320. European gold prices rose. In London gold traded at $648.40 per troy ounce, down from $651.70. In Zurich, the precious metal traded at $646.85, down from $650.65. Silver rose to $12.85, down from $13.02.


[R]11:30AM Stock averages traded lower, weighed by economic worries.[/R]
Concerns over mortgage subprime lenders and weaker-than-expected retail sales weighed heavily on the market sentiment. Continued weakness among housing and financial stocks helped to keep the major averages in the red, with investors worried that problems in the sub-prime mortgage business could spread throughout the broader economy. Accredited Home Lenders (LEND: chart) plunged 57% after it said it''s seeking more capital and exploring strategic options. New Century Financial Corp. (NEW: chart) disclosed a $500 million error over its debt obligations. On Monday, the NYSE suspended the company''s shares from trading after they fell more than 50%. Financial stocks traded in the negative, with American Express Co. (AXP: chart) falling 1.5%, Citigroup Inc. (C: chart), losing 2%, and JP Morgan Chase & Co. (JPM: chart), down 2.3%.

The brokerage sector showed some weakness, but a profit report from Goldman Sachs Group (GS: chart) that came in well above analyst forecast helped limit losses. The investment bank posted record-high profit in Q1, up 29% from a year ago, pushing its stock up 1.4%.

In the tech sector, Texas Instruments fell 1.3% after it reduced its Q1 profit and sales forecasts. Sandisk (SNDK: chart), however, rose 2.6% after UBS upgraded it to buy. Revlon said it swung to a Q4 loss, due to lower U.S. sales and restructuring costs. Qualcomm (QCOM: chart) also offered support, rising 5% after lifting its Q2 earnings and revenue guidance as well as its quarterly dividend. In late morning trading, the Dow Jones industrial average fell 40.45, or 0.33%, to 12,278.17. The Standard & Poor''s 500 index fell 3.93, or 0.28%, to 1,402.67, and the Nasdaq composite index slid 9.33, or 0.39%, to 2,392.96. The worries surrounding subprime lenders and sluggish retail sales drove up bond prices. The yield on the benchmark 10-year Treasury note fell to 4.51% from 4.56% late Monday.


[R]9:45AM U.S. stock markets opened down on growing subprime mortgage concerns.[/R]
U.S. stocks steeply dropped at opening Tuesday amid growing concerns about the viability of subprime mortgage lenders and worries that their troubles might spread to other sectors too. New Century Financial was again the main drag on the market as the NYSE said it would immediately suspend trading in its shares and move to delist the stock as they tumbled over 50%. New Century (NEW: chart) revealed that regulators began investigation into accounting errors that inflated the value of the company''s loan portfolio. Accredited Home Lenders (LEND: chart) plunged 48% after it said it''s seeking more capital and exploring strategic options.

However, stronger-than-expected financial results at Goldman Sachs (GS: chart) offered some help to the market. The investment bank posted a best-ever Q1 profit of 29% increase, helped by strong revenue from trading and investment banking. The company also said mortgages and credit products remained strong during the quarter. The stock gained 1%. Technology shares were other notable decliners, weighed by a downbeat outlook from Texas Instruments (TXN: chart), whose shares fell 1.7%. The biggest maker of chips for mobile phones, reduced its Q1 profit and sales forecasts.

On the economic news front, a week after retailers reported lackluster February sales, the Commerce Department said that sales at the U.S. retailers rose only 0.1%, blaming cold winter weather that kept shoppers away from stores. In the first hour of trading, the Dow Jones industrial average fell 76.42, or 0.62%, to 12,242.20. The Standard & Poor''s 500 index fell 7.43, or 0.53%, to 1,399.17, and the Nasdaq composite index slid 13.64, or 0.57%, to 2,388.65.


[R]9:30AM London equities were lower on Tuesday morning on SABMiller.[/R]
The UK market was lower on Tuesday. The FTSE 100 was 11 points lower to 6,222.3 in early trade in London.

Advancers

Alliance Boots once again led the advancing stocks. The chemist group rejection of Kohlberg Kravis Robert 10 pound a share offer suggested continued surmises that any successful offer would come in above that price. Alliance Boots gained a further 3 per cent.

ICI was up 2.4 per cent and also built on strong gains in the previous session on hopes that Akzo Nobel of the Netherlands could bid for its UK rival. Cadbury Schweppes rose 2.8 per cent on reports of stakebuilding in the soft drinks and confectionary group.

Imperial Tobacco added 0.3 per cent as it transpired that Altadis was keen to link up with the UK group to prevent a private equity takeover by Boots-stalker KKR.

The mining sector was also higher by strong numbers from Antofagasta as the Chilean copper producer reported an 86 per cent rise in profits to just under $3 billion. It rose 0.3 per cent

Decliners

SABMiller lost 3.3 per cent after it admitted that the Dutch company had cancelled its licence to brew Amstel lager in South Africa. The big surprise, though, was music retailer HMV, which plunged 11.6 per cent after it said it had not met cost cutting targets and revealed a 3 per cent fall in group same-store sales.

Financial stocks were also weaker, with Barclays down 1.3 per cent and Royal Bank of Scotland off 1.2 per cent. Amongst small-caps Biofuels Corporation slumped a further 43 per cent. The biodiesel producer said that its current margins were unsustainable and said profits for the year would be materially worse than market expectations.