Europe Factors-Shares to snap rally as S&P downgrades banks

Wed Nov 30, 2011 2:41am EST

LONDON, Nov 30 (Reuters) - European shares are set to snap a
three-session winning streak on Wednesday, with financial stocks seen coming
under pressure following Standard & Poor's overnight move to cut its credit
ratings on several big European and U.S. banks.	
    Barclays, HSBC, UBS, JPMorgan Chase & Co
, Citigroup, Goldman Sachs and Morgan Stanley were
among the banks that had their ratings reduced by one notch each as the result
of a sweeping overhaul of S&P's ratings criteria. The move could increase
funding costs for some banks. 	
    "Yesterday's downgrades by S&P on a number of banks in both Europe and the
U.S. has rocked sentiment in equity markets," Terry Pratt, trader at IG Markets,
said. "This move has essentially overshadowed the progress that had been made in
Brussels with regard to leveraging the EFSF bailout fund."	
    Euro zone finance ministers met in Brussels on Tuesday to agree on
leveraging their bailout fund so it can help Italy or Spain should they need
aid. The ministers, who may turn to the International Monetary Fund for more
help, also agreed to release the next aid payments to Greece and Ireland.
 	
    The ministers agreed on a detailed plan to insure the first 20-30 percent of
new bond issues for countries having funding difficulties and to create
co-investment funds to attract foreign investors to buy euro zone government
bonds. 	
    Futures for Euro STOXX 50, for Germany's DAX and for
France's CAC fell 1.2 to 1.3 percent, while U.S. stock futures 
 and dropped 0.7 to 1.1 percent. Japan's Nikkei average 
fell 0.5 percent.	
    On Tuesday, the FTSEurofirst 300 index of top European shares
finished up 0.8 percent at 947.89 points, the highest close since Nov. 18. The
index is down 15 percent so far in 2011.	
    Investors awaited a slew of U.S. economic numbers later in the session,
including ADP employment numbers and pending home sales figures, after data
showed on Tuesday consumer confidence in the United States jumped to its highest
level since July  	
     MARKET SNAPSHOT AT 0735 GMT                                 
                                              LAST      PCT CHG     NET CHG
     S&P 500                              1,195.19       0.22 %        2.64
     NIKKEI                               8,434.61      -0.51 %      -43.21
     MSCI ASIA EX-JP                                    -0.81 %       -3.69
     EUR/USD                                1.3265      -0.38 %     -0.0050
     USD/JPY                                 77.91        0.1 %      0.0800
     10-YR US TSY YLD                        1.983           --       -0.01
     10-YR BUND YLD                          2.292           --       -0.06
     SPOT GOLD                           $1,710.39      -0.23 %      -$3.90
     US CRUDE                               $99.10      -0.69 %       -0.69
 	
    * Wall St up for 2nd day on brighter consumer outlook 	
    * Asian shares fall on caution over euro zone bailout 	
    * FOREX-Euro inches up, takes EFSF plans in stride    	
    * Brent stays above $110, helped by Mideast tensions  	
    * Gold on course for 3rd day of gains; Europe eyed    	
    * LME copper falls 1.3 pct as euro zone woes weigh    	
    	
    COMPANY NEWS
     	
    WENDEL  	
    TE Connectivity Ltd is to buy Deutsch Group SAS, a maker of
heavy-duty electronic connectors, for about 1.55 billion euros ($2.06 billion)
as it looks to expand its presence in the defence and industrial transportation
markets. Deutsch Group is owned by French investment group Wendel. 	
    	
    SOCIETE GENERALE  	
    Societe Generale on Tuesday said its TCW Group unit, one of the largest U.S.
asset managers, is not for sale, rejecting a published report to the
contrary.  	
    Separately, Standard & Poor's affirmed its 'A+/A-1' long and short-term
ratings on Societe Generale and its core subsidiaries with a stable
outlook  	
       	
    BNP PARIBAS  	
    Following a review under Standard & Poor's revised bank criteria, the rating
agency affirmed its 'AA-/A-1+' long- and short-term ratings on French bank BNP
Paribas and its core subsidiaries with a stable outlook.  	
      	
    ROLLS-ROYCE 	
    British engineering group Rolls-Royce has been awarded contracts worth up to
$650 million by Brazil's state oil company Petrobras to support its
production activities offshore Brazil. 	
    	
    PIRAEUS BANK 	
    Greece's fourth-largest lender reported a nine-month loss of 287 million
euros ($382 million) on higher bad debt provisions, excluding the impact from a
planned writedown on Greek government bonds. 	
	
    BP  	
    U.S. federal prosecutors on Tuesday said BP broke pledges to improve
operations after causing the worst pipeline spill on Alaska's North Slope five
years ago and should be subject to additional punishment for its negligence. 	
  	
     	
    EADS  	
    Boeing could be at a disadvantage to Airbus because the bankruptcy of
AMR Corp, the parent of American Airlines, places up to $40 billion of
jet orders at the mercy of a U.S. bankruptcy court, lawyers and bankruptcy
experts said.  	
    	
    DEUTSCHE TELEKOM  	
    U.S. communications regulators released a staff report criticizing AT&T
Inc's $39 billion plan to purchase T-Mobile USA, even though they agreed
on Tuesday to let the companies withdraw their request for approval.
 	
    	
    RWE  	
    German utility group RWE struck a deal with unions to increase wages 2.7
percent for the roughly 25,000 employees in the country, the Sueddeutsche
Zeitung daily reported.  	
     	
    BAYER  	
    Bristol-Myers Squibb Co's and Pfizer Inc'S Eliquis drug may
reach the U.S. market more quickly after health regulators gave it an expedited
review. The drug prevents strokes in patients with a dangerously irregular
heartbeat and is rival to Bayer's and Johnson & Johnson's Xarelto.
 	
    	
    BANCO POPOLARE  	
    The Italian lender sees a positive contribution of 203 million euros to its
2011 net results from release of deferred tax credits, the bank said on Tuesday.
  	
     	
    INTESA SANPAOLO  	
    Moody's Investors Service said on Tuesday it had downgraded the bank's
public-sector covered bonds to Aa3 from Aa1 on review for downgrade, reflecting
the previous downgrade of Italy's sovereign rating.
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