European markets fall on US data

Europe's main stock markets fell for the second day running on Wednesday, after worse-than-expected US jobs data dimmed investors' hopes for an economic recovery.

London's FTSE index of leading shares closing 0.50 percent lower at 5,133.9 points. In Paris the CAC 40 index fell 0.49 percent to 3,795.41 points and Frankfurt's DAX closed 0.67 percent lower at 5,675.16.

US payrolls firm ADP said Wednesday that the US private sector shed 254,000 jobs in September, higher than the 200,000 expected by most analysts.

"The ADP employment number was much worse than expected, although equities were little changed," said GFT analyst David Morrison. "However, it doesn't bode well for Friday's non-farm payrolls" data, he added.

Friday's monthly report on the US job market was expected to show a loss of another 180,000 jobs and the unemployment rate rising from the current 9.7 percent to 9.9 percent.

Other data from the United States however showed a sharp slowdown in US economic contraction but flagging confidence.

"The upward GDP revision got traders excited but the dire consumer confidence number has seen investors rush to book profits ahead of the quarter-end," Morrison said.

European equities had slid on Tuesday as investors cashed in their gains from another rally of economic optimism, analysts said.

"Markets are seeking some fresh impetus for a move to either direction," said analyst John Murphy at ODL Securities on Wednesday.

"We are treading water at the minute, with investors appearing to be happy with the profits that have been banked thus far."

Wall Street shares also retreated for the second consecutive day Wednesday after the bigger than expected drop in private sector payrolls fueled increased jitters on the economic outlook.

The Dow Jones Industrial Average slumped 0.83 percent to 9,661.42. The technology-heavy Nasdaq composite shed 0.69 percent to 2,109.35 and the Standard & Poor's 500 index slipped 0.84 percent to 1,051.74.

"The GDP revision should have heartened traders and given them some reason to believe that second half economic growth could be nearly robust. But the notion that a jobless recovery can be sustained is starting to fade," said Douglas McIntyre of 24/7 Wall St.

Elsewhere in Europe, Amsterdam's AEX index fell by 0.25 percent to 311.35 points, Madrid's Ibex-35 fell 0.82 percent to 11,756.10 and the Brussels Bel-20 fell 0.21 percent to 2,485.62. Milan's FTSE Mib fell 0.39 percent to 23,473.

The Swiss Market Index closed 0.10 percent higher at 6,323.18.