From Standard & Poor's European MarketScope
Major European stock indexes were mixed on Tuesday amid a quiet start to U.S. trading and a decline in oil prices.
In Germany, the Xetra-Dax index ended Tuesday's session in the black. On the corporate news front, U.S. September car sales were down 7.6% year-over-year, mainly due to GM (GM) and Ford (F) sliding 24% and 20%, respectively. But DaimlerChrysler's (DCX) shares were up 1.45% as its Chrysler unit's sales were up 4% as it only saw a 1.8% loss in SUV sales, and Mercedes was 0.7% higher. BMW's (+1.83%) monthly sales came in at a solid 1.6% higher year-over-year, against tough comparisons. A report released Tuesday showed VW's (+5.02%) U.S. vehicle sales were up 3.7% last month.
Elsewhere, Deutsche Telekom's (DT) shares gained 0.66% on the news its mobile phone unit, T-Mobile, has signed a multi-year marketing agreement with the U.S. National Basketball Association, becoming the league's official wireless services partner. BASF (+0.78%) plans to raise prices for all its North American products because of a surge in energy costs and raw materials. The FT reports that the chemicals giant is not about to bid for Rhodia, as rumors suggested yesterday. ThyssenKrupp (-0.06%) plans to expand business in Brazil and North America, reports FTD, citing the compony's vice chairman, Ulrich Middelmann. Adidas (+1.52%) sees no further antitrust issues in the U.S. on its purchase of Reebok. Finally, Singulus (+19.45%) delivered its first production machines for next-generation Blu-ray DVD technology to major international customers.
In the UK, the Financial Times-Stock Exchange 100 index ended marginally lower, with investors using a significant correction in crude oil prices as another reason to sell the energy sector, rather than to go back into cyclicals. BP (BP) fell 2.82% after it said it will suffer a US$700 million hit in the third quarter because of hurricanes Katrina and Rita. Royal Dutch (RD) also fell, by 2.3%. The two oil stocks knocked 26 points off the FTSE.
Legal & General (-2.84%) also caused some pain as the Treasury presented a draft reform to levy taxes on funds in insurers' investment reserves. A concerned L&G says the additional tax could slash £200 million of its embedded value, or £500m in IFRS terms. Boots (-0.39%) and Alliance Unichem (-2.91%) saw profit-taking after yesterday's M&A boost. Rating agencies put Boots' credit outlook on watch for possible downgrade.
Among gainers, Hilton (+1.1%) benefited from news it might bid for the UK Lottery license. Meanwhile, the market saw a flight to defensive issues: AstraZeneca (AZN
, up 1.58%; Unilever (UL), up 0.92%; and Diageo (DEO), up 1.02%.
In France, the CAC40 index on a 3-year high on Tuesday. Sentiment was boosted by crude prices falling below US$65 per barrel on Access. Schneider Electric (+3.48%) headed the percentage and points gains thanks to an upgrade by SocGen. Bouygues (+2.74%) also lent support, lifted by Goldman Sachs' initiation of coverage with outperform.
Michelin (+3.85%) rallied after Goodyear said it would begin temporary production cuts in the U.S. after hurricane Rita caused supply disruptions. Michelin is seen picking up Goodyear's slack.
Total (TOT) fell 1.02%. French workers were staging a general strike Tuesday over wages. The workers will target five of Total's refineries, which will reduce runs, but not shut them down.
Shares in Rhodia (-2.19%) succumbed to profit-taking after hitting a record year high Monday on speculation of a takeover. However, according the the FT, a takeover was unlikely while the chemicals group was still restructuring and struggling to break a 3-year money-losing streak.