[R]1:00PM NY, 5:00 PM Frankfurt European markets ended lower, dragged down by weak travel stocks.[/R]

European stock markets erased earlier gains to close lower on Tuesday, led by weakness in the transport sector as investors sold shares in low-cost airline Ryanair. Worries that the Fed Reserve is less likely to reduce interest rates in the near future also dragged markets down.

Shares of budget airline Ryanair declined 6.8% after it issued disappointing outlook. The Irish carrier said that profit for fiscal 2007 rose a stronger-than-forecast 42%, but also warned that profit would rise just 5%, far below the 42% growth seen last year. Shares of rival easyJet also came under pressure, falling 6.8%.

On the side of the gainers, U.K. utility giant United Utilities rose 2.7% as it reported that its fiscal-year net profit more than doubled and announced a decision to sell its electricity-distribution assets. The German LHS surged 12.8% on deal news. The French CAC-40 lost 0.8% at 6,078.54, the German DAX Xetra 30 slipped 0.7% at 7,919.83, while the U.K.''s FTSE 100 fell 0.5% at 6,632.80


[R]11:30AM U.S. market averages traded lower on strong service-sector data.[/R]

U.S. market averages remained in the negative territory, weighed down by concerns that the Fed Reserve will not cut interest rates in the near future after Chairman Ben Bernanke made upbeat comments on the economy and service-sector data in May topped analyst estimates.

Retail, software and utilities sectors showed considerable weakness. Retailers were led down by Bed Bath & Beyond (BBBY: chart), falling 5.7% after the retailer issued its Q1 profit warning as a public company. Goldman Sachs downgraded the stock to neutral from buy. Another notable decliner in the sector was kitchen-cabinet maker American Woodmark (AMWD: chart) which fell 7.9%. Cache (CACH: chart), women''s apparel retailer, declined 9.9%.

In the utilities sector, Edison International (EIX: chart) slipped 2.3%, FirstEnergy (FE: chart) dropped 2.3%, and Dominion (D: chart) lost 2%. Housing stocks, transportation, and pharmaceuticals also remained under pressure. The Dow Jones industrial average was down 67.46 points, or 0.49%, at 13,608.86. Blue-chip stocks were led down by DuPont (DD: chart), down 2.3%, Merck (MRK: chart) and Home Depot (HD: chart), both falling 1.5%.

The Standard & Poor''s 500 was down 7.22 points, or 0.47%, at 1,531.96. The Nasdaq Composite was down 11.31 points, or 0.43%, at 2,606.98.


[R]9:45AM U.S. stocks opened in the negative on rate concerns.[/R]

Wall Street saw a weak opening Tuesday amid concerns that rate cuts are not likely in the near term after the Fed Reserve Chairman Bernanke said inflation risks remain to the upside.

The Nasdaq was weighed down by 5.7% drop in the shares of Bed Bath & Beyond (BBBY: chart) after the home goods retailer warned that its Q1 profit will miss forecasts. Goldman Sachs downgraded the stock to neutral from buy. Among blue-chip stocks, Dupont (DD: chart) was the biggest decliner, falling 2.2%, followed by Home Depot Inc. (HD: chart), down 1.1%, and Alcoa (AA: chart), losing 0.6%. Dupont was downgraded by Lehman Bros to equal from overweight.

Telecoms were led by Avaya Inc. (AV: chart) which gained 2.2% after the company agreed to a $8.2 billion buyout from two private-equity firms. Among other stocks in the sector, Ciena Corp. (CIEN: chart) dropped 5%, while Sprint Nextel Corp. (S: chart) lost 0.9%. Some software stocks posted notable losses. Communications software developer Openwave Systems (OPWV: chart) slipped 15.9% after the company rejected an offer to purchase 49% of its outstanding shares.

In other corporate news, Amgen (AMGN: chart) agreed to buy privately held Ilypsa for $420 million. Ericsson (ERIC: chart) agreed to buy German billing software firm LHS for $420 million, too. Shares of Amgen and Ericsson advanced 1% each. The Dow Jones industrial average was down 61.52 points, or 0.45%, at 13,614.80. The Standard & Poor''s 500 Index was down 6.33 points, or 0.41%, at 1,532.85. The Nasdaq Composite was down 9.53 points, or 0.36% at 2,608.76.


[R]9:30AM London trades slightly higher Tuesday on strong earnings results.[/R]

In late morning session, the FTSE 100 gained 21 points, 0.33%, at 6,686.2

[Advancers