* FTSEurofirst 300 down 1 pct at fresh 2-mth closing low
* Contagion fears persist as Portugal risks ratings downgrade
* InBev rises on strong results
By Harpreet Bhal
LONDON, May 5 (Reuters) - European stocks closed lower on
Wednesday, as sentiment was soured by the threat of a growing
debt crisis in the euro zone, offsetting positive results from
InBev <ABI.BR> and a rise in U.S. private sector jobs.
Some nerves were rattled after ratings agency Moody's
Investors Service put its credit rating for Portugal on a
three-month review, and a senior Moody's analyst said that as a
result, a downgrade of the Aa2 credit rating is now likely.
The pan-European FTSEurofirst 300 <> index of top
shares closed 1 percent lower at 1,023.41 points, ending at a
two-month low for the second straight session.
"There is a fear that maybe it's a correction or the end of
the cyclical counter trend bull market. We see an increase in
volumes on falling prices and that is not a good sign
technically," said Giuseppe-Guido Amato, strategist at Lang &
Schwarz in Frankfurt.
Banks were lower, but pared some earlier losses, with
Barclays <BARC.L>, HSBC <HSBA.L>, Banco Santander <SAN.MC>, BNP
Paribas <BNPP.PA> and Deutsche Bank <DBKGn.DE> off 0.1 to 2.7
percent. Greek banking shares <.FTATBNK> slipped 3.1 percent.
Societe Generale <SOGN.PA> slipped 0.8 percent to reverse
earlier gains hit when it reported forecast-beating results for
first-quarter profit, helped by investment banking and fewer
provisions on bad loans.
Among individual shares, world No.1 brewer Anheuser-Busch
InBev <ABI.BR> rose 2.3 percent after it earned more than
expected in the first quarter of 2010 as beer sales surged in
Brazil and it forecast stronger growth in the second half of the
year. []
Positive data helped support investors' confidence, as signs
of a recovery in the U.S. labour market grew after the private
sector showed job gains for the first time since January 2008,
according to the ADP Employer Services. []
Shares of oil major BP <BP.L>, which had tumbled 15 percent
over the past two weeks on concerns over the massive oil spill
in the Gulf of Mexico, bounced back on Wednesday, up 1.2 percent
while cleanup crews along the U.S. shore try to contain the huge
and growing slick. []
Across Europe, Britain's FTSE 100 <>, Germany's DAX
<> and France's CAC 40 <> lost 0.8 to 1.4 percent.
Spain's IBEX <> and Portugal's PSI 20 <> shed 2.3
and 1.5 percent respectively.
CONTAGION FEARS INTENSIFY
The 110 billion euros ($142.7 billion) bailout of Greece
unveiled over the weekend failed to dissipate worries on whether
it can sustain the tough austerity measures, and concerns on the
risk of contagion to other countries such as Spain and Portugal,
whose credit ratings were downgraded last week.
European policymakers warned of the risk spreading beyond
Greece to the euro zone, as unrest in Athens claimed its first
lives and investors fled to the safe haven of the dollar.
[]
"There are concerns again today carrying on from yesterday
about the level of debt across Europe," said Alwyn Phillips,
senior sales trader at IG Index.
According to Thomson Reuters data, around 260 billion euros
has been wiped off the UK's FTSE 100, Germany's DAX and France's
CAC 40 combined since April 15, more than Greece's 2009 Gross
Domestic Product of 240 billion euros.
(Additional reporting by Joanne Frearson in London and Blaise
Robinson in Paris; Editing by Mike Nesbit)
($1=.7709 euros)
