(RTTNews) - The European markets fell for the first time in three days on Wednesday after a report showed that U.S. Midwest manufacturing activity unexpectedly contracted in September.

The Institute for Supply Management - Chicago said the index of manufacturing activity fell to 46.1 in September from 50.0 in August, with a reading below 50 indicating a contraction in the sector. The decrease came as a surprise to economists, who had expected the index to edge up to 52.0.

There was further disappointment after Automatic Data Processing, Inc. said in its report that non-farm private employment in the U.S. fell by 254,000 jobs in September following a revised decrease of 277,000 jobs in August. The drop in jobs in the previous month was revised from the loss of 298,000 jobs originally reported.

The U.S. Commerce Department said in a report that the country’s GDP decreased at an annual rate of 0.7% the second quarter compared to the preliminary estimate of a 1.0% decrease. Economists had been expecting the drop in GDP to be revised to show a 1.2% decrease.

Crude for November delivery added $2.60 at $69.31 a barrel on the New York Mercantile Exchange, by the time the European markets closed, after a U.S. government report showed the country’s gasoline stockpiles dropped unexpectedly.

The FTSEurofirst 300 index of pan-European blue chips closed 0.47% lower at 997.56 points, but still managed to post its best quarterly rise in a decade, while the narrower DJ Stoxx 50 index fell 0.82% to 2,453.88 points.

Around Europe, the U.K.’s FTSE 100 index slipped 0.50% to 5,133.90, while France’s CAC 40 index fell 0.49% to 3,795.41 and Germany’s DAX index dropped 0.67% to 5,675.16.

Economy sensitive banking stocks were among the biggest losers. HSBC, Europe’s largest bank, fell 1.4%, while BNP Paribas, France’s largest bank, slipped 3% and Deutsche Bank, Germany’s biggest lender, dropped 2.4%. UBS, Switzerland’s largest bank, lost 1.2%.

Marks & Spencer, Britain’s biggest clothing retailer, dropped 3.4% after the company said it expects 2010 to be a tough year.

Belgian drugmaker fell 3.3% after the company increased a six-year convertible bond offer to ?450 million from ?350 million, and said it could raise as much as ?500 million to refinance debt.

German drugs and chemicals maker Bayer lost 3.1% after UBS downgraded the stock to “neutral” from “buy.”

On the other hand, Man Group, the largest publicly traded hedge-fund manager, climbed 7.5% after the company said assets under management rose to $43.8 billion in the fiscal second quarter from $43.3 billion at the end of June.

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Posted in Categories: Eurozone, Releases, Stocks, Switzerland, UK, USA.

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