European shares lower

European shares fell on Tuesday, dented by a slew of poor earnings news, contagion fears in the eurozone debt crisis after Spanish and Italian yields rose and worries about the debt stalemate in the United States. Disappointing earnings news dominated the fallers list. UBS lost 2.9 percent in volume nearly double its 90-day daily average after the Swiss bank reported weaker-than-expected second-quarter profits and said it was likely to incur "significant restructuring charges."
"It is very difficult for companies and there are concerns about the scale of restructuring needed for UBS. The market is very skittish," said Andrea Williams, who manages $2.1 billion in assets for Royal London Asset Management. Concerns about the eurozone peripheral debt problems hit other banking stocks, with Greek banks falling 6.3 percent on worries over how the private sector will participate in the plans to rescue Greece.
The STOXX Europe 600 Banks index has lost 23.3 percent since mid February, when concerns grew that the sector would face massive write-down in the event of a Greek debt default. The FTSEurofirst 300 index closed down 0.3 percent at 1,100.97 points, but the index recouped some of its earlier losses made after Italian yields rose following better-than-expected US consumer confidence in the afternoon.
In news after the market close, Deutsche Bank cut its exposure by about 70 percent to five peripheral eurozone countries due to contagion fears over Greece's debt crisis. There were also concerns over a possible default or credit rating cut in the United States as lawmakers remained in deadlock over a plan to raise the debt ceiling in the country, adding to the negative sentiment.
Earnings news also dented BP , which fell 2.6 percent, with volume heavy at 128.9 percent of its 90-day daily average after second-quarter profit lagged forecasts. Brokerage Arbuthnot repeated its "sell" stance on BP and said in a note: "We feel that there are much better returns to be had in the sector, particularly from the US majors." STMicroelectronics dropped 9.9 percent, with volume more than four-times its 90-day daily average, after the chipmaker said revenue would fall by as much as 5 percent in the current quarter and forecast the market would slow more than expected.