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Europe mixed, drugs fall
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August 10, 2000: 12:45 p.m. ET
U.S. court ruling hits drug stocks; Frankfurt climbs on telecoms, financials
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LONDON (CNNfn) - Europe's major bourses closed mixed Thursday, with pharmaceuticals on the decline in the wake of a U.S. court decision that could reverberate throughout the industry. Frankfurt was the only market not to succumb to the selling pressure, with financials and telecom stocks the top gainers.
Drug stocks traded lower across the region after a U.S. appeals court Wednesday set an earlier-than-expected end to Indianapolis-based Eli Lilly 's (LLY: Research, Estimates) exclusive right to sell Prozac, the antidepressant drug. The decision sparked fears that other pharmaceutical companies could suffer similar court intervention on generic-drug competition to their products.
London's FTSE 100 index fell 29.6 points, or 0.5 percent, to 6,384.4. Anglo-Swedish pharmaceuticals company AstraZeneca (AZN) led the losers, down more than 1.7 percent.
Zurich's SMI index also fell 0.5 percent to 8,202.8, with drug makers Roche and Novartis each down more than 1 percent.
Frankfurt's Xetra Dax rose 54.26 points, or 0.75 percent, to 7,280.97, with Deutsche Telekom (FDTE) up more than 4.5 percent as investors and analysts predict the German third-generation mobile phone license auction may claim its first victim, Swisscom's dibetel unit. Shares in dibetel pared earlier loss, declining 0.5 percent.
 The CAC 40 in Paris was only slightly lower, down 4.15 points at 6,566.03, with gains for telecom and media stocks offset by technology issues.
The FTSE Eurotop 300, a basket of some of Europe's biggest companies, dropped 0.4 percent to 1,640.68, with its pharmaceuticals component down 2 percent.
U.S. markets closed mixed Thursday. The Dow Jones industrial average rose 11.36 points, or 0.1 percent, to 10,917.55, while the Nasdaq composite fell almost 1 percent to 3,816.91.
In the currency markets, the euro halted its losses against the U.S. dollar - at least temporarily - fetching 90.76 U.S. cents, compared with 89.93 cents in late New York trading Wednesday. But one currency market expert said the euro may drop further.
"I think it's going to go further," Jane Foley, a currency market expert at Barclays Capital, told CNNfn. "The story's been the same for some time with the euro - the currency appears to ignore the good European economic news and latch on to the bad European news."
Drugs take a downer
European drugs stocks were down nearly across the board. Pharmaceutical firm Glaxo Wellcome (GLX) slipped 1.7 percent and its merger partner, SmithKline Beecham (SB-), fell 0.7 percent. Britain's biggest biotechnology company, Celltech (CCH), fell 2.3 percent.
German drug company Schering (FSCH) lost almost 2 percent while Danish drug maker Lundbeck fell 1.2 percent in Amsterdam.
Shares of Merck KgaA (FMRK), the ancestor of U.S. drug company Merck & Co. (MRK: Research, Estimates), shed 3.8 percent after reporting second-quarter pretax earnings fell 44 percent. That came even as Goldman Sachs and Lehman Brothers raised their price targets on the company, reflecting its new management team.
In London, technology stocks had a mixed day. Chip designer ARM Holdings (ARM) was the best performing stock FTSE, climbing 5.6 percent. Software and IT company Misys (MSY) jumped 2.8 percent, rival Logica (LOG) gained 2 percent and telecom equipment maker Marconi (MNI) climbed 3.1 percent.
Internet service provider Freeserve (FRE) fell 4.7 percent. German business daily Handelsblatt said T-Online, Europe's largest Internet service provider, no longer is in talks with its U.K. counterpart, further dousing takeover hopes that already had faded in recent weeks. Comsumer electronics firm Dixons (DXNS), which owns 80 percent of Freeserve, fell almost 3 percent.
Insurers were weaker across the continent. Royal & Sun Alliance (RSA) slipped 3.1 percent, CGNU (CGU) fell 2.3 percent and Europe's biggest insurer, AXA (PCS), declined 0.7 percent in France.
On the upswing in London was utility National Power (NPL), which rose 4 percent a day after Britain's government gave up its so-called "golden share" that allowed officials to veto any takeover moves involving the company.
Paris had a mixed day with no clear sector gaining or losing. Tech stocks were a prime example, with chip maker STMicroelectronics (PSTM) rising 3.1 percent while data network operator Equant (PEQU) declined 1 percent.
 Construction and mobile phone company Bouygues (PEN) gained 5.3 percent to top the leader board.
Shares of France Telecom (PFTE) pared early gains, climbing 0.2 percent after announcing an 18 percent rise in revenues for the first half of the year to  15.3 billion ($13.8 billion), amid strong mobile-phone and Internet service growth.
Other telecom stocks climbing, included Spain's Telefonica, up 1 percent, after appointing former finance director Fernando Abril-Martorell as chief executive following the departure of its controversial chairman last month.
Dutch telecom operator Royal KPN, which is bidding against Deutsche Telecom and France Telecom for a German license, rose 1.8 percent.
Also in the sector, shares of Germany's Mobilcom (FMOB) fell 2.6 percent, but pared an earlier 6 percent loss, after reporting first-half results
that were worse than expected. Mobilcom said sales in the first half of the year jumped 117 percent to 2.1 billion marks ($947 million) from the same period last year.
French tire maker Michelin (PML) advanced 3.1 percent after Japanese rival Bridgestone announced a recall of millions of its tires due to safety concerns.
In Germany, the financial sector had a mixed day. Dresdner Bank (FDRB) rose 3 percent, and insurer Munich Re (FMNV) climbed more than 2 percent, while HypoVereinsbank (FHVM) dipped 0.8 percent.
Carmaker DaimlerChrysler (FDCX) climbed 2 percent.
In Amsterdam, shares of KLM Royal Dutch Airlines rose 1.8 percent after it said it and British Airways (BAY) plan to file formal merger documents with the European Union in late September. KLM said last month the two airlines, which have been holding talks since early June, would not meet an expected EU filing date of early August and gave no new date. Shares of KLM are up nearly 73 percent since mid-May.
British Airways shares fell more than 1 percent in London. 
-- from staff and wire reports
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