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American Morning

American Investors Aren't Only Ones Taking Hit From Wall Street

Aired July 22, 2002 - 05:16   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANDERSON COOPER, CNN CORRESPONDENT: American investors aren't the only ones taking a hit from Wall Street.

CNN's Diana Muriel joins us now from London with the story of how European markets are being affected -- Diana?

DIANA MURIEL, CNN CORRESPONDENT: Well, they're taking a hit, too, this morning, right across the board. We were warned that it was going to be a rough ride this morning and those worries have been proved well founded.

Let me show you how the main markets are trading at the moment. This is the London FTSE, down almost two percent. We haven't been at these levels since October 1998. Similarly, in Germany it's down almost three percent. We last visited this level in Germany at around September last year.

Similarly in France, down two percent. It's only the Zurich SMI that's holding up, really because of Novartis, the drug company that came out with some good numbers. It represents about a quarter of the index there and that's taken some of the pressure off.

Let's have a look and see how the telecom sector is reacting. It's really to do with that WorldCom story and the bankruptcy filing that we saw on Sunday.

Now, Vodafone, of course, one of the big bellwether stocks in that sector on the London exchange. It's down over 2 1/2 percent. Nokia and Ericsson, of course, the mobile phone manufacturers, Nokia down three percent. Ericsson down 1.68 percent, and that's despite some concern in the "Wall Street Journal" that Standard & Poor's and the Moody's credit rating agencies might be downgrading the long-term credit for that company, the long-term debt for that company, to junk bond status.

B.T. Group is also being punished in the London market. And France Telecom, they've got some numbers out later on this week. The market holding fire a little bit on that stock in the French market.

This is the German focus today. Deutsche Telekom, of course, another one of those telecom stocks that's been hit by the WorldCom story. That's down over one percent. DaimlerChrysler also down quite sharply. Now, there's an investigation underway in the United States. Federal investigators concerned about possible price fixing by Mercedes Benz in the New York state area. So that's being looked at and that's hurting the stock this morning.

Hugo Boss down a whopping 16 percent. That company has come out with its second profits warning in two months. That company, of course, is Germany's largest fashion manufacturer. They have had big problems in the USA with their women's clothing line and that is what's hurt the company. And we're seeing them falling very, very sharply on the German mid cap stocks, the MDAX.

Looking towards the financial sector, and this is really taking some of the big punishment. Two reasons for this. Egon, which is the big Dutch insurer, they've come out with a profits warning this morning and that's why they're down so sharply. But there's also concern amongst the financial stocks that they're exposed to the WorldCom story and therefore they're seeing some pressure there -- back to you.

COOPER: Diana Muriel, thanks very much.

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