LONDON (ShareCast) - -Earnings fears hit European oil companies
-US economy contracts in fourth quarter
-Spain's 'bad bank' hunts for investors
-Italy business confidence down
Dax (Xetra: ^GDAXI - news) -30: -0.59%
FTSE Mibtel 30: -3.32%
Ibex 35: -0.77%
Stoxx 600: -0.62%
European equities tumbled Wednesday as earnings worries hit the oil sector and the US economy contracted in the fourth quarter.
A gauge of oil and gas companies plummeted including Italy's Saipem (Other OTC: SAPMY - news) which dropped 34% after a shock profit warning with an 80% fall in earnings forecast.
Goldman Sachs (NYSE: GS-PB - news) warned of a potential read-across for the rest of the sector.
Earnings fears also hit the tobacco industry including Imperial Tobacco (LSE: IMT.L - news) which decreased 4.06% after it said it expected first-half adjusted operating profit to be down year-on-year.
No less encouraging, the US Commerce Department released data which showed the county's economy shrank 0.1% at an annual rate in the fourth quarter.
It was the first instance the broad measure of all goods and services produced by the economy contracted since recovery from the financial crisis began.
In other US news, the Federal Open Market Committee will reveal its policy decision at 19:15 following a two-day meeting in Washington.
Spain's 'bad bank' calls for investors
Spain's bad bank, known as Sareb, is on the hunt for investors to participate in a capital increase planned for late February. Europa Press has cited sources saying that Iberdrola (Other OTC: IBDRY - news) may invest €10m.
The news comes as the country reported worse-than-expected contraction of its economy during the fourth quarter of 2012.
According to the preliminary data from the INE (government statistics office), Spain's economy fell 0.7% during the quarter, compared to the prior drop of 0.3%. Consensus had expected a contraction of 0.6%.
The Spanish government is coming to terms with the implementation of austerity measures required as part of the Eurozone bailout received for its financial sector.
Italy's business confidence falls
The Italian Statistics office ISTAT´s business confidence index for the month of January fell to 88.2 (Consensus: 89.5) after a reading of 88.9 in the previous month.
Elsewhere in the country, Italy's Finance Minister Vittorio Grilli has defended the Bank of Italy's supervision of the Tuscan bank at the centre of a bailout scandal.
The country has been in the spotlight ahead of its parliamentary elections in February.
Other assets rise
The euro soared to $1.35 for the first time since December 2011, increasing 0.59% Wednesday.
Brent crude features increased $0.305 to the $114.710 mark on the ICE.