GLOBAL MARKETS: European Stocks Drop; All Eyes On Cadbury By Andrea Tryphonides Of DOW JONES NEWSWIRES LONDON (Dow Jones)--European stocks fell into the red Tuesday, as traders looked to take profits following strong recent gains across the board, while the Cadbury saga, which rumbles on from one decade to another, took a new twist as Nestle ruled itself out of bidding for the U.K. confectioner.
By 0855 GMT, the pan-European Stoxx 600 index was down 0.3% at 256.8. London's FTSE 100 declined 0.2% to 5487.4, Frankfurt's DAX dropped 0.3% to 6031.7 and Paris's CAC-40 was 0.4% lower at 3999.3.
"The New Year started with a significant rally yesterday as some of the holiday cheer spilled over into the markets. However, the outlook is not so clear over the next few months," said Robert Pike, manager at Spreadex. "Many investors want to believe that last year's rally will continue, with equities performing well... However there is the specter of inflation and tax hikes as well as the end of quantitative easing looming," he said.
In London, Cadbury PLC fell 1.6% to 792.5 pence after Nestle S.A. said it would not be making an offer for the U.K. company. This followed its purchase of Kraft Foods Inc.'s Canadian frozen food business in a $3.7 billion cash deal. Nestle was last seen down 0.2% at CHF50.8. Meanwhile, Kraft said it would be using all the net proceeds from the sale to offer Cadbury shareholders an additional partial cash alternative of 60 pence per share. A Cadbury spokesman said Kraft's offer remains derisory.