From Standard & Poor's European MarketScope
Europe's major indexes traded flat to higher Tuesday morning. Investors awaited the US consumer confidence index and the Chicago PMI. US futures pointed to a higher open on Wall Street. Oil stayed below US$59/bbl as speculation of a rise in US stocks overshadowed OPEC cuts.
UK: The FTSE 100 index was flat at mid-session but with positive breadth, led by Friends Provident (+5.54%) and Shire (+2.98%). UK Gfk consumer confidence rose in October. In the sector, bad news continued for BP (BP)(-0.59%) as the US Chemical Safety Board said the oil major knew it had significant safety problems at its Texas City refinery well before last year's deadly explosion.
In earnings news, Friends Provident posted a forecast-beating 40% rise in third quarter sales to £1.597 billion. Imperial Tobacco (ITY)(+0.44%) saw a 5% rise in fiscal year adjusted profit from operations and said it is continuing to buy back shares while seeking value creating acquisitions. Antofagasta (+0.64%) posted a rise in third quarter copper production to 126,400. Drugmaker Shire got a boost after Credit Suisse put the neutral-rated stock on a short-term trading buy and a Citigroup target hike. Chip designer Arm's (+0.84%) third quarter income rose 11% and said it sees an in-line fourth quarter.
France: The CAC 40 index (-0.07%) pared earlier losses. Among those reporting, Sanofi (SNY)(-4.45%) was the worst CAC performer as it tabled third quarter net profit of €1.7 billion, down 11.6% year-over-year, on lower-than-forecast sales, due to the effect of a generic version of Plavix. Veolia Environnement (VE) (-0.85%) posted nine months sales of €20.657 billion, +12.4%. Suez's (SZE) (-0.91%) nine months sales fell short of estimates, coming in at €32.4 billion. The company kept its fiscal 2006 objectives. Separately, the CEO said on the radio that he won't sell the environmental unit.
Atos Origin (-2.06%) posted below-forecasts nine months revenues of €3.972 billion, -1.2%. It said that 2006 organic revenue growth will be around +1.5%9 vs. 3% previously. On the upside, tech stocks Cap Gemini (+2.43%) and STM (STM) (+1.96%) gained. The former was the best CAC performer. The latter was upgraded to buy by WestLB due to an anticipated strong CE semiconductor market environment in 2007.
Elsewhere, Italy's Finmeccanica is engaged in talks with EADS (+0.33%), on possible civil aviation deals, reported Il Giornale. Finally, Arcelor Mittal (-1.48%) announced plans to temporarily reduce European flat steel output amid rising inventory.
Germany: The Xetra-Dax index (+0.3%) traded above breakeven at mid-session Tuesday as European banking stocks were in focus as UBS (UBS) posted quarterly net earnings markedly below expectations. Deutsche Bank's (DB) (-0.01%) third quarter report tomorrow, though, is expected to show a solid set of figures. On the local data front, German retail sales unexpectedly fell in September by 1.7% m/m and 1.2% year-over-year, preliminary Federal Statistics Office data show.
On the earnings front, Metro's (-0.98%) third quarter sales rose 6.3% to €14.13 billion, in line with expectations, with quarterly EBIT coming in at a lower-than-expected €281.4 million, up 4.7% year-over-year. Germany's biggest retailer said it has made a solid start to the fourth quarter. Linde (-0.26%) reported third quarter group EBIT of €297 million, up 35% year-over-year and higher than expected, on group revenues of €2.95 billion, up 23.8% year-over-year.
FMC (-1.17%) tabled third quarter sales of US$2.23 billion, up 30% year-over-year, with quarterly EBIT before one-offs coming in at US$337 million. The group expects full-year sales of about US$8.4 billion against a previous forecast of €8.3 billion. Earnings aside, Focus-Money wrote that DaimlerChrysler's (DCX) (+3.3%) stock was fairly valued at €55.
S&P has upgraded its outlook on Lufthansa (+0.78%) to stable from negative. Heidelberg Druck (+2.09%) disclosed its intentions for a share buyback program of up to 5% of its capital stock. United Internet (+3.38%) is testing a sales partnership with E-Plus, KPN's (KPN) German unit.
Elsewhere: Piazza Affari continued to build on this morning's gains, meanwhile the SMI index (-0.45%) remained haunted by UBS's weaker-than-expected third quarter results.