RTTNews - The European markets fell for the second day on Wednesday after reports showed that the pace of contraction in the U.S. service sector unexpectedly accelerated and U.S. private sector employment showed another notable decline last month.

The Institute for Supply Management said its index of activity in the U.S. service sector edged down to 46.4 in July from 47.0 in June, 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 rise to 48.0.

According to a report released by Automatic Data Processing, U.S. non-farm private employment fell by 371,000 jobs in July following a revised decrease of 463,000 jobs in June. Economists had been expecting a decrease of about 350,000 jobs compared to the loss of 473,000 jobs originally reported for the previous month.

The U.S. Commerce Department said in its report that orders for manufactured goods rose 0.4%t in June following a revised 1.1% increase in May. Economists had been expecting orders to decrease by 0.8% compared to the 1.2% increase originally reported for the previous month.

Crude for September delivery fell $0.43 to 70.99 a barrel on the New York Mercantile exchange, by the time the European markets closed, after a U.S. government report showed a bigger- than-forecast increase in inventories.

The FTSEurofirst 300 index of pan-European blue chips closed 0.55% lower at 934.47 points, while the narrower DJ Stoxx 50 index fell 0.74% to 2,307.27 points.

Around Europe, the U.K.'s FTSE 100 index slipped 0.52% to 4,647.13, while France's CAC 40 index fell 0.51% to 3,458.53 and Germany's DAX index dropped 1.18% to 5,353.01.

Heavily weighted oil stocks slipped after crude oil prices fell. BP, Europe's biggest oil company, slid 1.4%, while Royal/Dutch Shell, the second biggest, dropped 3.9% and Total, the third biggest, declined 0.8%.

Deutsche Boerse, operator of Frankfurt Stock Exchange, slipped 6.5% after the company reported second quarter profit that fell from last year and missed analysts' estimate.

Swiss Re, the world's second biggest reinsurer, fell 2.2% after the company reported an unexpected quarterly loss.

On the other hand, Lloyds Banking Group, Britain's biggest mortgage lender, jumped 10.6%, as the company said provisions for bad loans will decline significantly after it posted a first-half loss of �.1 billion.

Societe Generale, France's third largest bank, climbed 6% after the company reported a smaller-than-expected drop in second quarter profit.

Axa, Europe's second biggest insurer, rose 1.7% after the company reported first-half profit that fell from last year but came in above analysts' expectations.

UniCredit, Italy's largest bank, surged up 3.9% after the company reported second quarter profit that beat analysts' estimate.

Carlsberg climbed 5.2% after the Danish brewer reported a 37% rise in second quarter profit.

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