LONDON, May 6: European stock markets closed mostly lower Tuesday, hit by another spike in oil prices to record highs and corporate results highlighting the damage done by the US subprime home loan crisis.

Dealers said bad news from Swiss banking giant UBS, which warned of up to 5,500 more job cuts as it grapples with massive subprime losses, dented sentiment.

Disappointing results from Swiss Re, the world’s largest reinsurance company, as it counted the cost of the credit market problems, added to the negative tone.

In London, the FTSE 100 was virtually flat at 6,215.20 points as investors returned from a long holiday weekend.

In Paris, the CAC 40 fell 0.44 per cent to 5,040.92 points and in Frankfurt the Dax was down 0.50 per cent to 7,017.10 points.

The Euro Stoxx 50 index of leading eurozone shares was off 0.50 per cent.

On Wall Street, the Dow Jones Industrial Average was down 0.16 per cent at about 1600 GMT, coming off early lows after sentiment was unsettled by the latest jump in oil prices and worse-than-expected results from Fannie Mae, the mortgage group.

“An ugly earnings report from Fannie Mae” caused some concerns, said Patrick O’Hare at Briefing.com.

“Oil prices and corporate headlines will be the main drivers of the trading action,” he added. Fred Dickson at DA Davidson said the stock market may be overextended after three weeks of gains.

“The market appears to be consolidating recent trends in stock prices, commodity prices and currencies,” he said. “With the earnings season winding down, the flow of market catalysts normally begins to subside.”

In Europe, dealers said the price of oil sparked some unease as it went hand in hand with a reverse in some of the dollar’s recent gains. With the euro picking up again, eurozone exporters were at a disadvantage.

In London, oil-dependent companies were in the firing line, with British Airways down 3.92 per cent at 239 pence as poor April traffic figures compounded the problem.

Among the miners, Rio Tinto jumped 4.06 per cent to 6,354 pence and BHP Billiton climbed 3.84 per cent to 1,948 pence.

Lloyds TSB fell 2.98 per cent to 439 pence among the banks.

In Paris, dealers said that despite the loss on the day, support at 5,000 points was holding firm and that was a good sign for the future.

“The fall was to be expected but the market nonetheless has shown unusual resilience in the face of bad news” on oil and corporate results, said one dealer.

Among the banks, BNP Paribas lost 1.20 per cent to 70.19 euros and Societe Generale was down 2.61 per cent to 76.40 euros.

EADS, the European aerospace giant, was down 1.59 per cent at 16.12 euros after the head of its Airbus unit did not rule out more delays on its flagship A380 superjumbo.

EADS had lost 3.82 per cent on Monday after reports of delays.

In Frankfurt, Adidas jumped 5.69 per cent to 42.70 euros on its strong results but Hypo Real Estate was down 3.51 percent at 22.85 euros after the mortgage lender’s first quarter figures disappointed.—AFP