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US trade jitters cause further falls

IRISH shares fell for a fourth day yesterday, as the volatile trading environment across the globe continued to take its toll on the Dublin market.

By the close of trading the ISEQ Overall Index was down 0.95pc, or 27.23 points, at 2,825.17. Some 3.5pc has now been knocked off Irish shares since the start of the week.

Dealers across Europe continue to look across the Atlantic as they wait nervously for a resolution to the US debt crisis.

Wall Street's leading chief executives, including Goldman Sachs' Lloyd Blankfein and JP Morgan's Jamie Dimon wrote to President Barack Obama and Congress to warn of "very grave" consequences of a default and urging them to cut a deal "this week".

"If the US defaults, it's bad for the whole world. They have to resolve this problem. Investors are pulling money out of stocks and buying gold. People are worried about the uncertainty and are looking for safe havens," said Jerome Forneris, at Banque Martin Maurel in Marseille.

Four days before the August 2 deadline, US lawmakers are still unable to secure a deal to raise the debt ceiling and prevent a default.

In Dublin, pharmaceuticals company Elan fell 4.07pc to €8.25 a day after it posted lacklustre results, while CRH slipped 0.80pc to €13.64. With a broad exposure to the US economy, CRH is especially vulnerable to the gyrations in the US economy at present.

The food sector had a difficult session. Greencore fell 2.11pc to 93c after the UK's Office of Fair Trading (OFT) said it was considering referring the company's deal for Uniq Foods to the Competition Commission.

Glanbia slipped 1.06pc to €4.65 while Kerry Group dipped marginally to €28.90.

Ryanair lost 2.65pc to €3.19 after the airline was told the OFT could investigate its holding in Aer Lingus.

Elsewhere, most European stocks declined on the US problem and poor results as companies from Volkswagen to Credit Suisse reported earnings that missed analysts' estimates.

National benchmark indices fell in 13 of the western European markets. France's CAC 40 Index slid 0.6pc. The UK's FTSE 100 Index climbed 0.3pc, while Germany's DAX Index retreated 0.9pc. The Stoxx Europe 600 rose less than 0.1pc.

Volkswagen slipped 4.2pc as Europe's largest carmaker said rising commodity prices and a strengthening euro would damp earnings gains this year.

Volkswagen also posted second-quarter EBIT of €3.17bn to miss estimates.

Credit Suisse dropped 1.6pc. The lender said it plans to cut about 2,000 jobs after second-quarter profit fell 52pc.

Alcatel-Lucent plunged 15pc. France's largest telecommunications equipment supplier fell amid concern spending by US mobile operators in the second half will slow.

Irish Independent