The European markets fell for the fourth day on Wednesday, as banking stocks slipped after Standard & Poor's lowered its ratings and revised its outlooks on 22 U.S. banks and energy and mining stocks lost ground after crude oil and copper prices retreated.

In economic news, the U.S. Labor Department said in its report that consumer prices edged up 0.1% in May after coming in unchanged in April. Economists had been expecting a somewhat more substantial increase in prices of about 0.3%. Core consumer prices, which exclude food and energy prices, edged up 0.1% in May following a 0.3% increase in April. The modest increase in core prices came in line with economist estimates.

The number of Britons claiming jobless benefits reached the highest level since July 1997, although the increase was less than expected, official data showed Wednesday. The claimant count was 1.54 million in May, up 39,300 over the previous month, the Office for National Statistics said. Economists had forecast an increase of 60,000. The claimant count rate rose to 4.8% from a revised 4.6% in April.

U.S. President Barack Obama will propose the most sweeping overhaul of the US regulatory system since the Great Depression later today. According to the White House, the President's plan will require that all financial firms that pose a significant risk to the financial system at large are subjected to strong consolidated supervision and regulation.

Crude for July delivery fell $0.74 to $69.73 a barrel on the New York Mercantile Exchange, by the time the European markets closed, after a U.S. government report showed a surprise increase in gasoline supplies in the world's largest consumer.

The FTSEurofirst 300 index of pan-European blue chips closed 1.93% lower at 845.76 points, while the narrower DJ Stoxx 50 index fell 1.65% to 2,097.81 points.

Around Europe, the U.K.'s FTSE 100 index fell 1.16% to 4,278.46, while France's CAC 40 slipped 1.64% to 3,161.14 and Germany's DAX index dropped 1.86% to 4,799.98.

Among banks, Deutsche Bank, Germnay's largest bank, dropped 4%, while UBS, Switzerland's largest, slipped 3.9% and Royal Bank of Scotland, Britain's second largest bank, fell 2.9%. Credit Suisse, the second biggest Swiss lender, lost 4%.

Heavily weighted oil stocks slipped after crude oil prices dipped below the $70 a barrel mark. BP, Europe's biggest oil company, dropped 2.4%, while Royal/Dutch Shell, the second biggest, fell 0.8% and Total, the third biggest, slipped 2.2%.

Similarly, mining stocks lost ground after copper prices declined in London. BHP Billiton, the world's biggest miner, slipped 3.8%, while Anglo American, the second biggest, dropped 6.3% and copper miner Antofagasta slid 6.5%.

Sandvik, the world's largest maker of metal-cutting tools, tumbled 8.5% after the company said it expects to post an operating loss for the second quarter.

Spanish utility Iberdrola slipped 6.1% after the company said it has raised ?1.325 billion by selling 250 million new shares to investors.

Sainsbury, Britain's third largest grocer, dropped 5.7% after the company announced plans to raise �445 million in a share sale and an issue of convertible bonds.

German fertilizer maker K+S plunged 14% after the company said it expects further significant reduction in revenues and earnings this year.

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