From Standard & Poor's European MarketScope
Major European equity indexes were finished mixed Thursday. Equities ran out of steam after earlier strength. Disappointing earnings from Pfizer (PFE ), Ford (F ), and McDonald's (MCD ) outweighed benign jobless claims, denting U.S. performances and hitting sentiment on European exchanges, despite a needed correction in crude oil prices.
Germany's Xetra-Dax index ended the session with only marginal gains. Among stocks on the move in Frankfurt, Siemens (-0.08%) has approached KKR about buying Legrand, the French electrical equipment maker which is pursuing an initial public offering, the FT reports. Legrand has an estimated value of €7 billion, including debt. Having seen third quarter license sales rise a better-than-expected 20% to €590 million, SAP (SAP ) (+3.08%) now targets 12-14% growth in license sales this year, up from a previous forecast of a rise of 10-12%.
In the auto sector, CEO Panke says BMW (-1.42%) has no need to cut workers in Germany like VW (-0.75%) and Mercedes. Meanwhile, DaimlerChrysler's (DCX ) (-1.37%) Mercedes unit has confirmed the number of planned lay-offs to be 8,500 following rumors that this number could be much higher. Porsche (+0.24%) wants to raise its VW stake to 24.9%, WirtschaftsWoche reports, citing managers at the Tokyo Motor Show, but refuted by the luxury cars maker.
Schering (SHR ) (-0.48%) has initiated additional Phase III trial of sargramostim as a result of patient recruitment delay in one study on Crohn's disease.
In the UK, the FTSE 100 index deflated in late trading as U.S. investors took profits after Wednesday's late rally. The DJIA down 0.11% and the Nasdaq 0.36% lower, helping send the FTSE down 3.7 points at the close. Sentiment remained cautious after comments from Bank of England member Richard Lambert suggesting the markets had overanticipated further cuts in interest rates.
Among London stocks in the spotlight, Royal Dutch Shell (RD ) (-0.90%) succumbed to oil prices retreating to US$60.50. The stock was also in focus on speculation the Anglo-Dutch group might be considering a takeover of Canada's Encana. Cairn Energy (+2.64%) jumped after Talisman (TLM ) announced it had agreed to take over Paladin Resources (+27.18%). Insurer Legal & General (-0.49%) unveiled better than expected new business numbers with a 36% increase in the UK in third quarter. Morrison (+2.25%) gained despite reporting a first half pretax loss of £73.7 million and saying the fiscal year figure would come at the lower end of the £50 million to €150 million guidance. BHP Billiton (BHP ) (+0.96%) will invest US$1.30 billion to expand capacity at its Area C iron ore mine in Western Australia by 20 million tonnes per annum. Colt Telecom (+10.09%) says conditions remain challenging but the stock gains on a price target upgrade from Morgan Stanley.
The CAC 40 index (+0.36%) in France petered out towards Thursday's close, but remained on a positive breadth of 26-12 as Wall Street traded in the red. Total (TOT ) (-0.05%) took a small knock on the decline in crude prices. Lafarge (LR ) (-2.03%) slid after saying its fiscal year guidance for operating income growth appears challenging. Schneider (+4.23%) supported the index after raising its fiscal 2005 sales and operating profit targets. Essilor (+2.13%) exceeded nine-month sales forecasts, and says it expected fiscal year +sales growth of 8-9%.
In the banking sector, a 51% majority stake for sale in China's Guangdong Bank has generated interest from SocGen (+2.25%), ABN Amro (ABN ) and Citigroup (C ). BNP Paribas (+1.21%) rallied further as bids for Banca Comerciala Romana will be scrutinized tomorrow. Danone (DA ) (-0.55%) fell after the FT's Lex queried its definition of organic growth. Gaz de France (+0.66%) announced plans to hike prices by 12% between November and March. SocGen thinks the announcement should have a positive impact, reinforcing the belief the stock is in a strong position.
Elsewhere, stocks in Switzerland closed higher as a slew of positive quarterly results provided a boost, supported by various broker upgrades. Nestle (+3.69%) provided a lift as it released stronger-than-expected third quarter sales growth Thursday morning. Nordic markets further pared gains in late trading as U.S. indexes continued to trade flat to lower. However, three out of four closed in the black, with only Helsinki's OMX (-1.78%) belying poor results from individual stocks.
Prepared by European MarketScope reporters Zaida Espana (France), Michael Sanderson (Germany), Mariella Mongio (Italy), Alexander Wisch (Netherlands), Holly Cook (Nordic), Emma Stevenson (Spain), Pawan Girglani (Switzerland), and Rocio Opazo-Aniotz (UK)