* FTSEurofirst 300 down 0.1 pct, Euro STOXX 50 up 0.4 pct
* Weak U.S. home sales, Apple sales wipe off early rebound
* Spanish Italian shares boosted by speculation of ESM boost
By Francesco Canepa
LONDON, July 25 (Reuters) - European stocks extended their
fall into a fourth session in thin trade on Wednesday and braced
for further losses as weak U.S. home sales data and revenue from
consumer bellwether Apple wiped out a tentative rebound.
Pan-European indexes turned negative in the afternoon, when
data showed U.S. single-family home sales fell by the most in
more than a year in June and Apple's quarterly revenue
came in lower than expected, hit by a sagging European economy.
The weak numbers from the United States came hard on the
heels of a disappointing reading for Germany's Ifo sentiment
index and much worse-than-expected U.K. preliminary GDP data for
the second quarter.
"U.S. new home sales printed as the lowest on record, UK and
German data (earlier on Wednesday) were weak and the euro zone
debt drama remains," Ishaq Siddiqi, a market strategist at ETX
"The push up earlier on ... could never be sustainable"
European shares had traded higher for most of the day,
helped by speculation the euro zone's bailout fund could be
given access to central bank money to help it defuse the
region's sovereign debt crisis, as suggested by European Central
Bank policy maker Ewald Nowotny on Wednesday.
Nowotny's comments helped Italy's FTSE MIB and
Spain's Ibex 35 rise 1.2 percent and 0.8 percent
respectively, after shedding around 10 percent in the previous
three sessions, while yields on the countries' bonds fell and
the euro gained ground against the greenback
"The market is driven by political announcements, which is a
reason to be nervous because politicians themselves are in
uncharted territory," Lorne Baring, managing director of B
Capital Wealth Management, said.
"Many investors and managers were whipsawed last summer and
there is a good possibility that it will be that kind of market
behaviour again this year, with accentuated moves to the up and
Baring said he was "steering clear" of European equities
after closing his only positions -- in Germany's Dax
and Britain's -- earlier this month, when the yield on
Spain's 10-year bond climbed above the psychological 7 percent
He was monitoring the Spanish bond yield, the euro and
indicators of the state of the funding market for any sign that
sentiment was improving, providing a new entry point for
European equities, while he kept his "overweight" positions on
U.S. shares and the dollar.
The FTSEurofirst 300 index provisionally closed
0.72 points lower, or 0.1 percent, at 1,017.89 points, adding to
the 45.86 points shed in the previous three sessions on mounting
concerns about the sustainability of Spain's finances.
Trading volume on the index was very thin at 73 percent of
its 90-day average, Thomson Reuters data showed, exacerbating
swings in share prices.
Britain's ARM Holdings was the top riser, up 8.6
percent in twice its volume average, as its results showed
demand for the firm's low-power chips, used in smartphones,
outstripped the industry.
German car maker Daimler led a rally among auto
stocks after posting a smaller-than-expected decline in results
and sticking to its forecast for roughly flat underlying profits
Shares in the group were up 4.1 percent, the best performers
in a 1.9 percent stronger European auto sector.
About a fifth of major European companies have reported
results so far this earnings season, with half missing analysts'
forecasts, Thomson Reuters Starmine data shows.
Earnings growth estimates have been cut by around 6 percent
since the start of the year for European companies, compared
with 1.7 percent for S&P 500 companies.
Confirming a mixed picture for European earnings, Deutsche
Bank sank 4.1 percent after issuing a profit warning,
which fuelled worries the German lender may have to raise
It was the biggest faller on the Euro STOXX 50
index, which closed up 0.4 percent at 2,159.09 points.
CHARTS POINT DOWN
Technical charts suggested the euro zone blue-chip index was
likely to resume its downtrend after creating a 'bearish gap'
between Friday's bottom and Monday's top, which now acted as a
resistance on the index between 2,220 and 2,235 points.
On Tuesday, the index had also closed a 'bullish gap' -
created at the start of the late June rally - which had been
supporting the gauge at 2,167-2,184 points.
"All these negative signals incite us to be bearish for the
coming sessions, with a short term target corresponding to June
lows at 2,050...within the next one or two weeks," Ouri Mimran,
technical strategist at Natixis in Paris, said.
"We still play the break out of this level and a return to
the September 2011 level low of 1,936 points (in the next couple
Mimran said this scenario would be invalidated in the short
term if the Euro STOXX 50 managed to close the bearish gap at
2,235, triggering a rebound towards 2,400.