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European Indexes Mixed

Continental investors waited for U.S. jobs data Friday morning

From Standard & Poor's European MarketScope

European indexes ended the week mixed as US indexes traded in the red. Oil rose to US$58.80/bbl after the US consulate in Nigeria warned of militant attacks on oil facilities.

UK: The FTSE 100 index closed marginally below the gain line after a spike in crude price offset stronger-than-expected economic data in the US. Gold snapped its rally after the US$ gained on jobs data.

In local earnings: British Airways' (BAB)(-3.44%) second quarter pretax profit dived 27% to £176 million, hit by the disruptions caused by security measures, adding that it is to sell BA Connect. The airline scaled down its fiscal year revenue growth target by half a percent to between 4.5% to 5%.

BSkyB (+1.18%) posted a lower first quarter pretax profit of £166 million, but TV and broadband additions beat forecasts. In other news, Gallaher (+1.12%) rose on a positive report in the FT, but rumors also abounded that Japan Tobacco may bid.

Vodafone (VOD)(-1.11%) brought a case against Telecom Italia (TI) after the latter suspended negotiations on opening up its fixed network. Russia's Severstal quashed speculation that it might bid for Corus (CGA)(-0.21%), saying the steelmaker is overvalued, the FT reported. Food equipment maker Enodis (-5.04%) rebuffed a nil-premium merger approach from upmarket stove maker Aga.

Germany: The Xetra-Dax index (+0.26%) closed higher on Friday, but off earlier highs. Allianz's (AZ)(-0.74%) third quarter net income doubled to a better-than-expected €1.6 billion, boosted by some €300 million for the sale of UK group Four Seasons Healthcare. Quarterly revenues fell to €22.6 billion from €23.8 billion last time. The insurance giant raised its full-year profit outlook to net earnings of more than €6 billion.

Commerzbank (+4.31%) posted third quarter net profit of €217 million, a touch above expectations, with quarterly operating profit at €337 million. It said it was confident it would be able to pay a higher dividend for 2006. Deutsche Telekom's (DT) (-0.37%) board received a letter from British hedge fund Laxey Partners that it had to review its strategy and consider selling non-core businesses, wrote FAZ.

Market talk had it that ThyssenKrupp (-0.34%) may bid for Salzgitter (+0.42%), with the permission of the State of Lower Saxony, which is the biggest stakeholder (25.17%). According to Rome's daily Il Messaggero, Mediaset is expected to make a binding offer on 50.5% of ProSieben (+0.35%) next Tuesday. Deutsche Boerse's (+1.11%) third quarter results are due out on Monday. Cheuvreux said net profit should come in at €173.8 million, +58% year-over-year.

France: The CAC 40 index (+0.49%) came off highs in late trade as Wall Street went into reverse. Locally, Publicis (-1.57%) was the worst performer as it cut its 2006 forecast for sales from ongoing businesses as account activity declined more markedly than expected in the third quarter after the loss of accounts, including Cadillac and Becks. Quarterly sales rose 2.6% to €1.01 billion. A flurry of brokers cut their targets.

Vinci's (+0.28%) nine months sales rose 20% to €18.43 billion - a touch above expectations. AGF (+0.27%) posted third quarter revenue of €4.27 billion, +4.9%. Trigano (-6.51%) plunged as it warned on its 2005-2006 results guiding on an operating margin of around 8%, 200bp lower vs. 04'-2005.

Elsewhere, EADS (-0.76%) will accept Angela Merkel's plan of a German investor buying the EADS stake that DaimlerChrysler (DCX) aims to sell, Handelsblatt said. Separately, Eurocopter faced delays in a military helicopter program, La Tribune said. Alstom (+1.59%) asked a Paris court to review the award of a €2.7 billion contract by SNCF to Canada's Bombardier, Bloomberg wrote.

Elsewhere: The SMI (+0.61%) ended solidly higher with financials leading as strong quarterly results from Germany's Allianz and Commerzbank complemented a broker upgrade on Credit Suisse.

In Italy, both the SPMIB (+0.58%) and Mibtel (+0.57%) indexes closed trading with considerable gains.

Alexander Wisch, Rocio Opazo-Aniotz, Claudia Perotti, Michael Sanderson, Emma Stevenson, Mariella Mongio, Pawan Girglani, Guarav Panchal, Julien Manrique, Isabell Witt, Sara Oscarsson, Ben Marino, John West

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