Wednesday May 7, 05:13 PM
Euroshares close higher as tech gains, earnings offset Dow weakness - UPDATE
(Updating with full report)
LONDON (Thomson Financial) - Europe's leading exchanges closed in positive territory as tech stocks made headway and after a largely positive set of earnings releases on this side of the Atlantic offset losses on the Dow.
At the close, the DJ STOXX 50 was up 26.28 points or 0.81 percent to 3,288.48, while the DJ STOXX 600 finished the day up 2.85 points or 0.87 percent to 329.54.
In the U.S., the Dow was off lows but still down 56.0 points or 0.43 percent to 12964.6 amid ongoing concern about new record high oil prices, weak housing data and the future direction of U.S. rates.
The Nasdaq Composite was almost flat at 2480.1, down 3.21 points or 0.13 percent thanks to strong numbers from Cisco overnight.
'European stocks have been on the advance today mainly as a result of the positive rally into the close in the U.S. over night,' said David Evans, market analyst at BetOnMarkets.com.
'Rumours of UK rate cuts and whispers of easing from the ECB have also added to the rally ahead of tomorrow's MPC (A050540.KQ - news) rate announcement.'
Evans (EVAN.PK - news) believes rates will be kept on hold given inflation is still riding high and after the hawkish comments on U.S. rates from the Fed's Thomas Hoenig.
In Europe, technology stocks got a boost after after U.S. peer Cisco Systems (NASDAQ: CSCO - news) unveiled a consensus-beating third-quarter report, spurring hopes that a turnaround in the sector lies ahead.
The news lifted telecom equipment makers, with Alcatel (Paris: FR0000130007 - news) -Lucent up 3.7 percent and leading gainers on the STOXX 500, while Nokia (Xetra: 870737 - news) rose 3.66 percent and Ericsson (Stockholm: ERICB.ST - news) gained 3.54 percent.
Among technology stocks, ASM International (Amsterdam: ASM.AS - news) climbed 7.75 percent after Dresdner Kleinwort lifted its rating to 'add' from 'hold' and JP Morgan lifted its price target for the Dutch chip group to reflect the group's restructuring efforts.
France Telecom (Paris: FR0010560771 - news) added 0.86 percent after the group unveiled higher-than-expected sales and gross operating profit for the first quarter, but gains were kept in check by continuing uncertainties over the group's M&A ambitions.
Fastweb (Milan: FWB.MI - news) added 3.55 percent as data on new clients helped to offset weaker than forecast first-quarter losses and prompted Deutsche Bank (Frankfurt: DB9999 - news) to upgrade the shares to 'buy'.
Swisscom (Virt-X: SCMN.VX - news) fell back 2.57 percent as investors voiced their disappointment over the incumbent's first-quarter results, which failed to meet expectations, hit by acquisition costs and currency effects.
Shares in Lafarge (Paris: FR0000120537 - news) added 5.06 percent after the group reported better-than-expected first-quarter sales. The news lifted peer Saint-Gobain shares 2.09 percent.
Turning to financials, Commerzbank (Xetra: 803200 - news) added 1.63 percent, despite a cautious outlook for the year.
Traders said the results came in at the top of forecasts.
Elsewhere among financials, Deutsche Boerse (Xetra: 581005 - news) gained 2.23 percent after it released record earnings numbers last night after the close, beating analysts' expectations as it said first-quarter EBITA came to 425.8 million euros.
Analysts praised the group's strong performance at its Eurex division. Sal Oppenheim restated its 'strong buy' rating.
Axa (Paris: FR0000120628 - news) recouped early losses to close 1.2 percent higher as the market shrugged off initial disappointment over a mixed set of first-quarter activity indicators, to focus on evidence of resilience in key markets.
In Denmark, Carlsberg AS lost 2.9 percent after the brewer posted a lower-than-expected operating profit for the first quarter.
Jyske Markets analyst Jens Houe Thomsen said the group's EBIT came in 5 percent below consensus at 388 million crowns, and mainly reflects the fact that Carlsberg (Copenhagen: DCARLB.CO - news) has chosen to allocate more costs than expected in the quarter.
In M&A talk, RWE AG (Xetra: 703712 - news) . shares were higher in late afternoon trade as market talk resurfaced that France's EDF (Paris: FR0010242511 - news) is interested in RWE and wants to pay 135 euros a share for the German utility. RWE shares added 2.45 percent.
British Energy (LSE: BGY.L - news) added another 2.3 percent after reports EDF is planning to rubber stamp a solo offer for the UK's nuclear group at an extraordinary meeting today. EDF shares were down 0.33 percent.
TomTom (Amsterdam: TOM2.AS - news) was 3.88 percent higher amid reports the group's offer for TeleAtlas will get EU approval by May 14.
Banco Comercial Portugues (Lisbon: BCP.LS - news) shares extended yesterday's late bounce, up 2.21 percent, amid ongoing evidence of stake building and mentioning Angolan oil company Sonangol and Macau casino magnate Stanley Ho as possible buyers.
Shares in Ferrovial soared in late morning deals amid hopes the builder's Cintra (Madrid: CIN.MC - news) unit will present a bid with the Macquarie Group for the mega Pennsylvania Turnpike tender this Friday. Cintra shares added 2.47 percent. Ferrovial shares moved up 4.42 percent.
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