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European Shares Dented by Caterpillar Outlook

Reuters With CNBC.com
Monday, 22 Oct 2012 | 11:43 AM ET

European shares fell on Monday after U.S. industrial bellwether Caterpillar joined other multinational manufacturers in giving a sobering take on the outlook for the global economy.

The FTSEurofirst 300 Index provisionally closed down 0.5 percent at 1,106.60 points, having dropped 0.8 percent on Friday.

Caterpillar, the world's largest maker of tractors and excavators, reported a higher than expected profit but investors in Europe focused instead on its warning that the global economy was slowing faster than it had expected.

The firm's cautious view follows similar comments from a number of companies in recent weeks, and by the close in Europe all STOXX Europe 600 sectors, bar banks and insurers, were in negative territory.

"It is being treated as more macro than just a set of company results, and with a lack of other news flow today, I think people are being cautious on the back of it," Will Hedden, a sales trader at IG, said, referring to the Caterpillar news.

Prime Minister Mariano Rajoy's party, the center-right People's Party, won elections in his home region of Galicia on Sunday, a win seen as an endorsement of the government's austerity drive. However, the separatist Basque Nationalist Party (PNV) gained the most votes in the Basque country's elections, highlighting the division between regions and central government.

The Spanish IBEX 35 Index closed provisionally down 0.7 percent on Monday.

Major European Indexes

  Name Price   Change %Change Volume
FTSE
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CAC 40
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DAX
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