U.S. data lifts Europe
Report shows U.S. productivity rising: European bourses close mixed
LONDON (CNN) - European bourses ended mixed on Tuesday, after promising U.S. data reversed earlier heavy falls.|
Investors had shied away from high-tech and aerospace stocks, amid signs both sectors were vulnerable to recession.
But the gloom was lifted after Wall Street rallied in the wake of a U.S. government report that showed productivity in America rose at a 2.5 percent annual rate in the second quarter.
London's FTSE 100 closed a shade higher, up 0.2 percent at 5,536.8, while the blue chip CAC 40 index in Paris dropped 0.3 percent to 5,051.62, and Frankfurt's Xetra Dax rose 0.2 percent to 5,758.16.
In the U.S. on Monday, stocks had earlier tumbled after Lehman Brothers said Intel (INTC: Research, Estimates), the world's largest chipmaker, would slash prices by 50 percent on its high-end chips, raising the prospect of a price war with rival AMD (AMD: Research, Estimates).
Investors had also been nervous ahead of an announcement by Cisco Systems (CSCO: Research, Estimates), one of the world's biggest makers of equipment for the Internet, which is expected to show a huge decline in fourth-quarter earnings. The company reports after Wall Street trading closes later Tuesday.
But the Labor Department productivity report injected life into the major U.S. stock indices as investors started betting on improved economic times ahead.
In London, technology stocks dominated the gainers on the FTSE 100, with telecom services company Colt Telecom (CTM) topping the leader board, up 6.4 percent.
Software companies Logica (LOG), Misys (MYS) and CMG (CMG) all ended more than 3 percent higher.
U.K. medical technology company Amersham (NAM) rose 3.5 percent after it reported a 24 percent rise in first-half earnings, topping market expectations.
BP (BP-), the world's third-largest publicly traded oil company, closed 2.6 percent higher following its second-quarter earnings report, which showed profit before one-time items jumped 5.2 percent.
Royal Bank of Scotland (RBOS) climbed 2.7 percent after posting a 42 percent rise in first-half profit.
Aerospace stocks headed south amid a rash of negative developments among airlines and plane makers.
On the CAC 40 in Paris, European aircraft manufacturer EADS (PEADS) was the biggest loser, ending more than 5 percent lower after Airbus, in which it has an 80 percent stake, said it was cutting its sales target for 2003 to 400 planes from a previous goal of 450, as demand for large airliners softened.
French media-to-aerospace company Lagardere (PMMB) dropped 3.3 percent and train and turbine maker Alstom (PCGE) ended off by 2.6 percent.
Europe's No. 4 telecom equipment maker Alcatel (PCGE) closed 1.6 percent lower. France Telecom (PFTE) was down 0.8 percent.
Among phone equipment companies, Nordic heavyweights Nokia and Ericsson rose 0.6 percent and 2.8 percent respectively. British telecom testing equipment company Spirent (SPT) fell 4.3 percent.
BASF (FBMW), Europe's biggest chemicals company, fell 1.4 percent after posting a 15 percent fall in second-quarter profit and warning that profit for 2001 would not meet the previous year's level. Rival Bayer (FBAY), which reports its earnings on Thursday, eased by 0.2 percent in Frankfurt.
Commerzbank (FCBK) was the main gainer on the Xetra Dax, rising nearly 3 percent amid market speculation that Italian bank Unicredito Italiano might make a takeover bid. Hypovereinsbank (FHVM) was up 2.9 percent while Deutsche Bank (FDBK) rose 1.6 percent.
The AEX index in Amsterdam was slightly higher, up 0.3 percent while the SMI in Zurich was little changed from Monday. Milan's MIB30 index dipped 0.2 percent.
The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, rose 0.3 percent, with the computer and information technology sectors both in positive territory.
In midday trading in the U.S., the Dow Jones industrial average gained 43.17 to 10,445.04. The Nasdaq composite index rose 6.12 to 2,040.39,