Shares in some competitors of Carillion (>> Carillion) rose after the long-struggling construction and support services company collapsed, with banks refusing to lend it any more money.
Serco (>> Serco Group plc) jumped 7.3 percent, Interserve (>> Interserve plc) 2 percent and Kier Group (>> Kier Group plc) 3.5 percent, while Balfour Beatty (>> Balfour Beatty) fell 3.3 percent.
While the STOXX index has seen a strong start to 2018 and has held at its highest levels since August 2015, weakness among banking and energy stocks kept the index in negative territory, while a stronger euro added pressure.
"European equities have been on a tear since the beginning of 2018, and we were due some form of a pullback," Jonathan Roy, market strategist at Ocean Capital Group, said.
"What we're going to have to see now are economic figures coming through as strong as they have been."
The pan-European STOXX 600 <.STOXX> index ended down 0.2 percent, while Euro zone blue chips <.STOXX50E> ended little changed. Cyclical stocks, whose profits are most sensitive to the strength of the economy, have been the best equity sector performers this year.
Finnish mining equipment maker Metso (>> Metso Oyj) was the biggest faller on the STOXX, dropping 9.8 percent after its fourth-quarter earnings missed expectations.
German retailer Metro (>> Metro) fell 3.8 percent after a sales update, with its Russian business showing a slowdown in sales in the Christmas quarter.
"Russia is likely to be the catalyst for any share price re-rating, and there is no sign of any progress yet on this front," analysts at Raymond James said in a note.
GKN (>> GKN) rose 4.1 percent after suitor Melrose (>> Melrose Industries) said it planned to meet shareholders of the British automotive and aerospace equipment maker following a rejected takeover offer.
Shares in Azimut Holding (>> Azimut Holding) were the top risers, up 12.7 percent after the Italian asset manager said it would double its dividend as it reported record net inflows.
(editing by John Stonestreet)
By Kit Rees