From Standard & Poor's European MarketScope
Germany's Xetra Dax index ended lower Tuesday, with 24-6 negative breadth, as Wall Street trended lower. U.S. investors took profits after last night's broad rally, with enthusiasm about the choice of Ben Bernanke to replace Alan Greenspan as Fed chairman giving way to renewed focus on earnings. And they were mixed. The disappointing outlook from chipmaking giant Texas Instruments (TXN ) kept Infineon (-0.50%) in check. A weak statement from France's Michelin weighed on Continental (-1.71%), while Adidas (-1.20%) continued to suffer on disappointment from Reebok's (RBK ) figures.
A few Dax stocks still managed to end on higher ground, with MAN (+1.13%) leading the scoreboard as peer Volvo revealed strong third quarter numbers and outlook. DaimlerChrysler (DCX ), which was higher for most of the day, ended down 0.39% ahead of its third quarter report tomorrow. In the broader market, Postbank (+3.20%) jumped after announcing acquisition of BHW for €1.8 billion. Merck (-3.08%) ended lower on profit-taking after strong third quarter figures and good guidance released this morning. Vossloh (-4.12%) fell throughout the day after warning fiscal 2005 profits will fall 17%.
In the UK, the FTSE 100 index closed lower with BP (BP ) dragging on the market. The oil giant lost ground after saying hurricanes Katrina and Rita resulted in the loss of as much as 1.5 million barrels per day of production in the U.S. Gulf of Mexico. Royal Dutch Shell (RD ) (-0.63%) fell in sympathy ahead of its own report on Thursday. Leisure group Whitbread (-4.36%) plunged after saying it expects the consumer environment to remain challenging and reversing the trends of the pub restaurants business will take time.
Shares in Marconi (+5.13%) jumped further after Ericsson confirmed it will buy the group's telecoms equipment and international services businesses. Reckitt Benckiser (-3.74%) sank despite beating third quarter forecasts, on fears over rising costs. Carpetright (+2.01%) reported a 6.2% decline in total sales for the 25 weeks to 22 October, with LFL down 6.7%. On the broker front, Aviva (+0.46%) was lifted by a CSFB target price upgrade and a JP Morgan recommendation to switch out of Prudential (+0.83%) and into Aviva. Morgan Stanley upped its target on BAE Systems (+0.4%) to £3.35 from £3.15.
France's CAC 40 index (-0.56%) took a further knock at the close, ending with a negative breadth of 25-13. Wall Street was in the red as investors locked in profits following yesterday's rally. L'Oreal (-2.86%) remained depressed throughout the session after unveiling a flaccid performance in Western Europe and luxury goods. Michelin (-7.74%) deflated after announcing concerns over fourth quarter and fiscal 2005 performances. Dassault Systemes (+2.46%) was higher on third quarter sales up 17% to €213.8 million, driven by SolidWorks. Nexans (+0.94%) posted in-line third quarter sales of €1.68 billion but warned that fiscal 2005 debt could increase due to hikes in copper prices.
France Telecom (FTE ) (+0.88%) provided much needed support after the European Commission cleared the acquisition of a 80% stake in Spain's Amena. Cap Gemini (+0.71%) was higher as Goldman Sachs applauds the appointment of Salil Parekh as head of project and consulting business in North America. Alcatel (ALA ) (+1.43%) remained strong as rival Ericsson is offering £1.20 billion for the UK's Marconi, including £700 million to cover the pension deficit. Investors kept an eye on STM (STM ) (-1.01%) and Saint Gobain (-0.9%), which report third quarter sales after the close.
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)