European markets closed down Tuesday, after a number of Wall Street's biggest firms missed earnings expectations as a result of the consistently strong dollar.
The pan-European Euro Stoxx 600 Index ended around 0.8 percent with losses accelerating around U.S. market open after a raft of disappointing earnings pushing the Dow Jones almost 400 points lower.
Greek stocks ended around 3.5 percent lower, with banking stocks one of the major underperformers after Greece's election result on Sunday. Investors deemed a Greek exit from the euro zone unlikely despite anti-austerity party Syriza's victory this weekend, but lenders from Italy, Portugal, Spain and Greece showed some major losses proving concerns are still present.
Bank of Piraeus lost 12 percent, Alpha Bank was down 11 percent and the National Bank of Greece fell 11 percent. Uncredit shares were lower by 2 percent with Banca Popolare di Sondrio losing around 2.5 percent.
In earnings news, Dutch technology group Philips highlighted mores costs for 2015 and cut its earnings target on Tuesday; shares fell over 5 percent in early deals.
Meanwhile, shares of German engineering group Siemens lost 3 percent after it reported falling profits and a reshuffling of its management board.
In the U.S. weak fourth-quarter corporate earnings, largely due to currency headwinds, sent Dow futures 300 points lower before dropping sharply at the open. Orders for U.S. business equipment also unexpectedly declined in December.
Caterpillar fell after the Dow component and maker of mining and construction equipment reported a lower profit short of estimates.
Orders for business equipment fell 3.4 percent last month, illustrating the impact of the slowing global economy on U.S. multinationals.
On the data front, a flash fourth-quarter figure for gross domestic product (GDP) in the U.K. showed a worse-than-expected figure of 0.5 percent. However a yearly figure showed that growth in 2014 was at the fastest pace for 7 years.
Euro zone leaders have made their feelings known about Syriza -- a party that wants to see Greece's debt restructured -- with regards to a debt haircut. Although German Finance Minister Wolfgang Schaeuble once again ruled out a debt haircut for Greece on Monday, the chairman of the euro zone group of finance ministers, Jeroen Dijsselbloem, said they were ready to work with Syriza.
In other news, ratings agency S&P cut Russia's sovereign credit rating to junk status on Monday evening, bringing it below investment grade for the first time in a decade. The ruble weakened to trade around 5 percent lower against the dollar, following the announcement, which had been expected.
In business news, Aer Lingus' board recommended an improved 1.36-billion-euro ($1.52-billion) takeover offer from International Consolidated Airlines Group (IAG) on Tuesday.
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