Europe tumbles for third day

Accounting concerns and Wall Street declines drive markets lower

LONDON, England (CNN) -- European markets tumbled for the third day in a row on Wednesday as concerns over corporate accounting standards and weak earnings cast a shadow over almost every sector.

London's FTSE 100 ended 2.7 percent lower at 4,420.1 and the CAC 40 blue chip index in Paris dropped 4.3 percent to 3,656, while Frankfurt's electronically traded Xetra Dax was down 2.6 percent at 4,256.54 in late trading (the German market was set to close at 1900 GMT).

The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, fell 2.9 percent, with the insurance, pharmaceuticals and information technology sectors among the top decliners. Only the tobacco sub-index managed to end the session in the positive column.

The insurance sector was led lower by Munich Re (FMUV3), the world's biggest reinsurer, which said it had set aside another $500 million for the World Trade Center disaster. (Full story) Its shares were down 4.1 percent to 233 euros in late Frankfurt trading.

Europe's largest insurer Allianz (FALV) was down 6.2 percent in late trading, while Zurich Financial and Credit Suisse both finished down 6.6 percent.

The media sector was also lower, dragged down by Vivendi Universal (PEX), the world's second largest media group. Its shares dropped 7.5 percent to 16.93 euros after news that French securities regulators had raided the group's Paris office as part of a probe into its accounting. (Full story)

Technology and telecom stocks were hit with another poor showing by Nasdaq earlier on Wednesday, after the U.S. tech-heavy market tumbled in the previous session.

Nokia, the world's biggest mobile phone maker, fell 5 percent to 14.13 euros and Swedish rival Ericsson lost 1.9 percent to 15.80 crowns.

France's Alcatel (PCGE), Europe's biggest telecommunications equipment maker, dropped 7.6 percent to 6.05 euros, extending the previous session's losses after Moody's Investors Service cut its debt rating to "junk" status.

German rival Siemens (FSIE) was down 2.9 percent to 57.63 euros in late Frankfurt trading after a magazine report that its telecom networks unit ICN would post a 850 million euro loss for the year ending September 30. The company declined to comment on the report.

Deutsche Telekom (FDTE), which had been higher for most of the session, turned lower in late Frankfurt trading -- falling 1.4 percent to 11.15 euros. Early on Wednesday, there were reports that embattled chief executive Ron Sommer could be ousted by the supervisory board next week. (Full story)

Royal Dutch, which owns 60 percent of Royal Dutch Shell, the world's second-largest oil producer, fell 8.4 percent in Amsterdam and Shell Transport & Trading (SHEL) lost 4.6 percent in London.

Anglo-Dutch consumer products giant Unilever (ULVR) slid 3.2 percent in London. Royal Dutch and Unilever both fell heavily after Standard & Poor's yanked their stocks from its benchmark S&P 500 index. Dresdner Kleinwort Wasserstein cut its rating on Royal Dutch to "hold" from "add" after it was dropped from the index.

The AEX index in Amsterdam dived 4.6 percent, Milan's MIB30 index lost 2 percent and the SMI in Zurich fell 3.2 percent.

In the U.S. on Wednesday, weakness in components Johnson & Johnson and General Motors sent the Dow Jones industrial average sliding, while the Nasdaq was pushed lower after telecom service provider Qwest Communications, already being scrutinised for potential accounting discrepancies, said it had been notified of a criminal probe by the U.S. Attorney's office.

At midday, the Dow Jones industrial average was down 49.50 points to 9,046.53, while the Nasdaq composite index was 2.52 points lower to 1,378.60. The Standard & Poor's 500 index was off 7.76 points to 945.07.