Euro Stocks End Mixed on Economic Worries

European stock markets ended mixed Monday after a wobbly start to the week, as fears that the U.S. economy risks plunging into a recession following Friday's weak December employment report were reignited.

Wall Street also turned lower after a positive start, as bears took the upper hand and a dip in the price of oil dragged down energy stocks.

Asian markets closed mostly lower, with Japan and Korea particularly hard hit. U.S. stocks tumbled on Friday, dragging the Dow to its worst three-day start to a year since
the Great Depression, as a 5 percent rise in the unemployment rate heightened fears the economy is heading into a recession.

Just days before the European Central Bank's rate-setting meeting, ECB President Jean-Claude Trichet said the bank will continue to focus on fighting inflation, and that the concerted liquidity injection at the end of last year by the world's major central banks contributed to easing tension in the money markets.

Among active stocks, Credit Suisse fell 2.6 percent after the Sonntag newspaper reported that it expects the investment bank to write down 2.5 billion Swiss francs ($2.25 billion) more due to subprime-related losses in the U.S. Credit Suisse declined to comment on the story.

"This kind of rumors and this kind of stories show you the continuing nervousness that exists among investors in the banking sector," Peter Thal Larsen, Banking Editor with the Financial Times, told "European Closing Bell."

"People are willing to believe that more bad news is to come," Thal Larsen added.

EADS slumped 7.5 percent after Deutsche Bank cut the Airbus maker to "sell" from "hold," due to uncertainly over commercials orders for this year.

Northern Rock made gains of 0.3 percent after a report that Goldman Sachs is close to completing a 15 billion pound ($29.5 billion) financing package for investors interested in buying the troubled UK lender. Shares later lost some momentum, trading 2.1 percent higher.

In the auto sector, BMW gained 2.6 percent after being added to Goldman Sachs' conviction buy list. But other auto shares elsewhere in Europe suffered, with French car makers still not being able to fully recover from Friday's slump.

In the telecom sector, Nokia Siemens Networks, a joint venture between the two mobile telephones makers, said it has won a $935 million contract to build a full turnkey 2G and 3G mobile network for Zain in SaudiArabia.

But their shares were hit by general weakness in the technology sector across Europe. Siemens traded 1.5 percent lower, while Nokia shares were 3.5 percent lower.

And in the retail sector, J Sainsbury fell 3.6 percent after a report in The Times that the UK's third-biggest supermarket chain is understood to have missed internal sales and profit targets in the run-up to Christmas.