* FTSEurofirst 300 ends down 0.3 pct at 1-wk closing low
* Banks, insurers drop after lukewarm reception to U.S. plan
* Sanofi rises after forecast-beating earns, growth plan
By Blaise Robinson
PARIS, Feb 11 (Reuters) - European stocks lost ground on
Wednesday, ending at their lowest closing level in a week, as
Washington's fresh banking rescue plan got a lukewarm reception
while investors digested a raft of mixed earnings.
Sanofi-Aventis <SASY.PA> surged 8.1 percent after the
pharmaceutical group posted better-than-expected results and
investors applauded the company's new growth strategy.
The FTSEurofirst 300 <> index of top European shares
closed 0.3 percent lower at 803.37 points, its lowest closing
level since Feb 3.
But the picture was mixed around Europe, with UK's FTSE 100
index <> and Germany's DAX index <> both gaining 0.5
percent and France's CAC 40 <> adding 0.2 percent.
"As long as we don't get signals that the bottom has been
reached for consumer spending and on investment spending, stocks
will remain very volatile and stuck in a bear market," said
Alexandre Iatrides, fund manager at KBL Richelieu.
"We're still in a downward trend, and the hopes surrounding
the U.S. banking rescue plan somewhat eclipsed for a while the
negative earnings and macro newsflow. But the plan is not as
simple as people had hoped, and the focus is now back on the
deterioration of the macro environment as well as on the
complete lack of visibility for companies," he said.
U.S. Treasury chief Timothy Geithner on Tuesday unveiled a
new bank rescue plan that would put $2 trillion to work mopping
up mortgage-related assets and unclogging the credit market.
Shares of banks and insurers were among the biggest losers
on Wednesday, with Lloyds <LLOY.L> dropping 7.9 percent, Natixis
<CNAT.PA> losing 7.5 percent and Aegon <AEGN.AS> down 4.1
percent.
AXA <AXAF.PA> dropped 7.2 percent as traders cited market
talk that the European insurer would slash its dividend. A
spokesman for AXA declined to comment.
BNP Paribas <BNPP.PA> shed 2.1 percent after shareholders of
Fortis <FOR.BR> threw out the state-led deals that carved up
their embattled financial group, delivering a blow to BNP
Paribas's expansion plans.
"It's not completely over yet but they'll have to start
again from scratch. We will know very soon if BNP wants to go
ahead," said Kepler Capital Markets analyst Pierre Flabbee.
"On the one hand, BNP will be able to get out of having to
finance Fortis and take on its illiquid assets. But the deal had
a lot of sense. If it doesn't go ahead, I think it would be a
shame," he said.
Also among the biggest drags on the market on Wednesday,
French energy group EDF <EDF.PA> fell 3.3 percent after French
daily La Tribune reported that the company has increased a
provision to reflect a year-long extension of regulated prices
to 1.2 billion euros ($1.55 billion) for 2009 and 2010. EDF,
which is due to report results on Thursday, declined to comment
on the report.
On the upside, ArcelorMittal <ISPA.AS> gained 1.1 percent
after the steelmaker reported fourth quarter results in line
with its own guidance and said it is on track to cut debt by $10
billion this year.
Siemens <SIEGn.DE> rose 2.2 percent, boosted by Deutsche
Bank's upgrade on the company to "buy" from "hold".
In a note to clients, the brokerage cited Siemens' resilient
portfolio and said the engineering conglomerate has the
potential to reduce gross costs by about 4 billion euro.
"Industrial demand is falling with unprecedented speed but
Energy and Healthcare have different drivers and are very
unlikely to collapse, in our view," the brokerage said.
(Additional reporting by Juliette Rouillon in Paris; Editing
by David Cowell)
