Investors in Europe take some profits off the table
Joshua Raymond, Market Strategist at City Index commented: "Investors in Europe decided to take some profits off the table today after gains of over 2% since the start of the week.
What we have seen is simple profit taking as a precaution with the markets entering into a raft of crucial economic data over the next three days.
Traders are starting to turn their attention to this afternoon's US ADP employment figures, which are expected to show a decline in private sector job losses for a ninth straight month. We also have the FOMC minutes later this evening and depending on the ADP figure, this may give investors more excuses to take some more positions off the table in the run up to the close.
The very poor British Consumer Confidence data is having a lagging affect today, which together with Marks and Spencer's results is hurting sentiment for the retailers.
The heavyweight energy and banking sectors have been the main subjects of profit taking so far.
Banks lag
The banking sector has risen over 6% this week alone and has been the main driver of the FTSE 100 and so naturally it has been the most susceptible to profit taking today, with investors closing out some positions in Lloyds Banking Group and Standard Chartered.
Energy firms weak
Energy stocks are also dragging European Indices lower too, with the recent rally in crude oil prices stuttering of late and convincing investors in energy firms to cash in their gains.
Marks and Spencer falls
Marks and Spencer is the main faller on the FTSE 100, losing over 5% after the retailer disappointed with its trading update. Despite reporting its first rise in sales for two years, it has missed market forecasts with sales coming in at 0.8% when the market was hoping for 1.2% or higher.
The problem is that great results from John Lewis and Next recently may have raised investors hopes a little too high and with Marks and Spencer failing to tow a similar line to some of its competitors, it is feared that 2010 may continue to be a very tough year for the retailer."