EUROPE MARKETS: Deutsche Bank, Daimler Putting Pressure On Germany's DAX

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02/02/2017 | 10:57 am

By Carla Mozee, MarketWatch

Reckitt Benckiser in talks to buy Mead Johnson Nutrition Co.

European stocks lost ground Thursday, with Deutsche Bank AG among the companies whose shares investors are chopping down in the wake of financial updates.

The Stoxx Europe 600 index gave up 0.2% to 362.51, as health care, telecom, financial and industrial shares declined. But technology, commodity, utility and consumer-related stocks moved higher. The pan-European index on Wednesday rose 0.9% , breaking a three-session losing streak.

Deutsche Bank shares (>> Deutsche Bank AG) (>> Deutsche Bank AG) were near the bottom of the Stoxx 600, with a 6% slide putting them on course for their worst session in fourth months. The lender posted a worse-than-expected fourth-quarter net loss of EUR1.9 billion ($2.05 billion) after taking EUR1.6 billion in litigation charges .

The bank, which has recently agreed to settle some large legal matters in the U.S. and the U.K., still has unresolved investigations.

The drop in Deutsche shares were helping to push Germany's DAX 30 index lower by 0.4% to 11,618.31.

Other movers: Also in Frankfurt, shares of Daimler AG (>> Daimler AG) fell 3.8%. The auto maker's fourth-quarter net profit rose to EUR2.15 billion , but that fell short of a projection of EUR2.26 billion in a Dow Jones survey of analysts.

Meanwhile, Swatch Group Ltd. shares (>> The Swatch Group SA) fell 1.4% after the Swiss watch maker said 2016 net profit dropped 47% to 593 million Swiss francs and revenue fell 11% to 7.55 billion Swiss francs. But Swatch anticipates "healthy growth" in 2017.

Novo Nordisk A/S (NOVO-B.KO) (NOVO-B.KO) fell 5.7% after the Danish drug maker cut its sales and operating profit outlook .

On the upside, Reckitt Benckiser (>> Reckitt Benckiser Group Plc) rose 2.3%. The maker of Lysol and Vanish has confirmed it's in talks to buy baby-food maker Mead Johnson Nutrition Co. (>> Mead Johnson Nutrition CO) in a deal worth $16.7 billion.

Royal Dutch Shell PLC (>> Royal Dutch Shell Plc) (>> Royal Dutch Shell Plc) was up 1.7%, with the oil producer saying fourth-quarter cash flow from operations leapt nearly 70% to $9.2 billion. That appears to be enough to cover Shell's cash dividend payments for the period. Fourth-quarter and annual profit at Shell dropped.

National indexes: France's CAC 40 was flat around 4,793.04 and Switzerland's SMI pulled back 0.6% to 8,282.63.

The U.K's FTSE 100 was down 0.1% at 7,099.18 . Investors will watch to see if recent upbeat economic data for the U.K. will prompt the Bank of England to change its position on interest rates at its 'Super Thursday' meeting today.

Also: Time to buy the beaten-down pound? Bank of America spots a sterling bottom

The pound was buying $1.2703 compared with $1.2684 late Wednesday.

Also on the radar Thursday will be the release of the U.K. government's White Paper on its Brexit strategy. U.K. lawmakers on Wednesday evening voted to allow the government to trigger Article 50 to begin the Brexit process. But the bill still has more stages to work through before final passage.

The euro was buying $1.0807 versus $1.0768 late Wednesday.

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