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Europe mixed, euro drops
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August 8, 2000: 12:55 p.m. ET
Bank and tech stocks rise; euro falls to a10-week low
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LONDON (CNNfn) - Europe's leading markets closed mixed Tuesday, with technology and bank stocks leading the gains after U.S. economic data raised hopes for no interest rate increase this month. But the euro fell to a 10-week low against the U.S. dollar after the report.
London's FTSE 100 index slipped 29.7 points, or almost half a percent, to 6,358.1, with music producer and publisher EMI Group dropping 7.6 percent after 28 U.S. states filed a suit against the world's five largest record labels, accusing them of fixing prices of compact discs and demanding unspecified damages.
 The CAC 40 in Paris rose just 13.4 points, or 0.2 percent, to 6,532.44, led by data network operator Equant and telecom equipment maker Alcatel.
Frankfurt's Xetra Dax gained 10.59 points, or .15 percent, to 7,123.81, with Europe's biggest retailer, Metro, and consumer electronics powerhouse Siemens among the top gainers. The SMI in Zurich was little changed at 8253.4.
The FTSE Eurotop 300 index, made up of a basket of some of the region's leading companies, rose 0.3 percent, with its technology index up more than 2.3 percent.
Wall Street edged higher. The Dow Jones industrial average gained 0.4 percent and the Nasdaq composite added 0.1 percent to 3866.37 as European markets closed.
U.S. figures showed productivity up by a greater-than-expected 5.3 percent in the second quarter, while labor costs fell 0.1 percent against a forecast 0.6 percent increase.
In the currency market, the euro fell to 89.93 U.S. cents, a new ten-week low, from 90.87 cents in late New York trading Monday. The euro fell more than 1 percent against the yen to ¥97.90 after remarks by Bank of Japan's Masaru Hayami sparked speculation the central bank could raise interest rates as soon as this week.
Banks and financials rise
In London, shares of Barclays (BARC) rose 3.9 percent. Goldman Sachs repeated an "outperform" rating on the stock and raised earnings forecasts between 5 and 8 percent on the bank and set a target price range of 1,670p to 1,780p for the stock.
 Goldman's upgraded pre-tax profit forecasts were £3.5 billion for 2000, followed by £3.8 billion and £4.175 billion for the subsequent two years.
Other banks and financials stocks that rose included Bank of Scotland (BSCT), up 5.6 percent, Alliance & Leicester (AL-), up 2.2 percent, Lloyds TSB (LLOY), gaining 2.2 percent, and insurer Royal& Sun Alliance (RSA), jumping 2.2 percent.
BNP Paribas (PBNP) climbed 1.8 percent and Credit Lyonnais (PCL) added 1.2 percent in Paris, Germany's Commerzbank (FCBK) rose 1.2 percent, rival HypoVereinsbank (FHVM) climbed 1.3 percent, and insurer Munich Re (FMUV) advanced 2.2 percent.
Retailer Kingfisher (KGF) rose 3.2 percent. Merrill Lynch upgraded its investment rating on the retailer to "buy" from "neutral" and set a price target of 620 pence on the stock. Catalog retailer Great Universal Stores (GUS) rose 2.2 percent and Germany's Metro (FMEO) climbed 2.2 percent.
Drug companies slid in London. Britain's SmithKline Beecham (SB-) dropped 2.4 percent and merger partner Glaxo Wellcome (GLXO) shed 2.6 percent.
Shares in Colt Telecom (CTM) fell 8.9 percent. Paul Chisholm, the American who built the network operator in just eight years, will step down as CEO next year. The news overshadowed unexpectedly strong second-quarter results. Earnings before interest, tax, depreciation and amortization rose to £1.6 million in the three months to June 30, compared with a loss of £1.4 million a year earlier. Internet data carrier Energis (EGS) fell 4.5 percent.
BP Amoco (BP-) fell 2.3 percent. The world's second-largest oil company's second-quarter results failed to surprise the market.
Technology stocks rose. In Germany, consumer electronics powerhouse Siemens (FSIE) added 2.8 percent while its electronics components unit Epcos (FEPC) rose 0.3 percent, chip maker Infineon Technologies (FIFX) rose 1.6 percent, and Europe's biggest software firm, SAP (FSAP), climbed 2.2 percent.
Tech firms were generally higher in Paris, with shares of network operator Equant (PEQU) up 4.8 percent and telecom equipment maker Alcatel (PGCE) climbing 2.4 percent.
French consulting and IT services firm Cap Gemini (FCAP) fell 1.5 percent. The company is due to report first-half sales figures Wednesday, and is expected to lower its forecasts for the full year after a weak second quarter, analysts said.
Outside of the FTSE 100 in London, shares of handheld device maker Psion (PON) climbed 1.5 percent after reporting pre-tax profit before special items rose to £7.7 million ($11.6 million) from £2.8 million a year earlier. The company also said it will issue shares in Symbian, the wireless joint venture with technology and telecom firms built around Psion's operating system, when market conditions are ripe.
Shares of German chemicals company BASF (FBAS) fell 6.2 percent despite the release of a better-than-expected second-quarter profit report. Pre-tax profit rose 151 percent to  954 million ($867 million), compared with an average forecast of 924 million, according to a Reuters survey of analysts.
BASF said business was boosted by its oil, gas, plastics and fibers segments, but also said profit margins had come under pressure as a result of higher raw materials prices. The company said those increases have been only partially offset through higher selling prices.
 Shares of utility conglomerate Suez-Lyonnaise des Eaux (PLY) rallied 5.1 percent to 182.1.
Morgan Stanley Dean Witter raised its rating on the company to "strong buy" from "outperform" and raised its price target to 220 per share from 210. On Monday, MSDW Private Equity and U.K. cable firm NTL agreed to buy 49.9 percent of Suez's Noos cable operator from France Telecom for about $1.2 billion.
Shares of airline Deutsche Lufthansa (FLHA) dropped 4.8 percent after analysts at Merrill Lynch cut the stock to a "hold" from a "buy". Europe's biggest airline, British Airways (BAY), dropped 2.6 percent in London.
Shares in Deutsche Telekom (FDTE) lost 3.2 percent amid concern that increased bidding for third-generation mobile phone licenses in Germany could force telecom companies to take on more debt. After 87 rounds, the bidding in Germany's auction of four to six UMTS, or Universal Mobile Telecommunications System, licenses totaled $10.25 billion. France Telecom (PFTE) fell 1.5 percent while Vodafone AirTouch (VOD) rose 1.3 percent.
In Amsterdam, Internet service provider World Online rose nearly 8 percent after confirming it has held talks with Italy's Tiscali about a takeover of the Dutch ISP. Shares of Tiscali, an Internet and telecommunications firm, gained 0.2 percent in Milan. 
-- from staff and wire reports
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