From Standard & Poor's European MarketScope
The major European indexes were trading below breakeven at mid-session Friday. US non-farm payrolls for December were expected to show additions of 100k vs. 132k in November. The unemployment rate for December was seen unchanged at 4.5%. Wall Street was seen opening lower. Oil prices hovered around US$55.44/barrel after a near 9% slide in the last two days amid mild winter weather in the US and pessimism surrounding demand for fuel for the year ahead. A profit warning from Motorola (MOT) also weighed on sentiment.
UK: The FTSE 100 index pared earlier losses, but was still trading in the red as investors eyed economic data from across the Atlantic. Oil and utilities were the worst performing sectors. Utility stocks took a beating after a report that the companies face a crackdown following an EU inquiry revealing evidence of collusion and other severe market failings. Scottish & Southern (-3.11%) and International Power (-2.60%) fell.
In company news, Vodafone (VOD) (+0.17%) key shareholder State Street has told The Times that the mobile giant should consider abandoning its US$18 billion pursuit of Hutchison Essar after the Hinduja brothers entered the auction.
Among the few risers: Reed Elsevier (+2.20%) jumped on talk of a bid or an asset swap with Wolters Kluwer. ICI (+1.30%) gained on a UBS target upgrade and a positive note. Next (+3.72%) continued to build on Thursday's advances as more brokers lifted their price target on the stock.
France: The CAC 40 index (-0.27%) continued to trade in negative territory at mid session, with Alstom (-4.58%) dragging it down after Citigroup downgraded the stock to sell from hold. At home, in M&A news, Sanofi (SNY) is a candidate to buy Merck AG's generic drugs activities, La Tribune said.
Albert Frere and LVMH chairman Bernard Arnault are planning a bid for Suez (SZE) (-1.06%), the weekly Marianne said. Frere and Arnault would combine Suez's electricity and gas units with GDF (+0.43%) and Electrabel, and sell other businesses, according to the magazine.
SocGen (+0.15%) bought a majority stake in Moldova's Mobiasbanca for €18.4 million. The Independent reported that Saint Gobain (-0.08%) is mulling an offer for the UK's Wolseley with the bidding expected to start at £15 per share. Renault's (+0.11%) 2006 sales fell 4% to 2.43 million units. Air France (AKH) is seeking partners from the SkyTeam alliance to join a possible bid for Alitalia, Finanza & Mercati reported.
Dassault Aviation (+2.42%) booked a record 140 orders for its Falcon aircraft, according to Les Echos. M6 (+1.00%) will book a gain of about €260 million in 2006 after merging its pay-TV unit with that of Vivendi (V) (-0.33%).
The Xetra-Dax index (-0.45%) remained below the gain-line at mid-session Friday. On the German corporate news front, key for the likes of E.On (EON) (-3.14%) and RWE (-3.11%), Europe's biggest energy companies face an intensified crackdown by the EU competition commissioner following an inquiry into the sector that found evidence of collusion and other severe market failings, wrote the FT.
The executive committee of VW's (+0.78%) supervisory board will study the planned truck alliance between MAN (-0.65%) and Scania next Thursday. DCX's (DCX) (-0.7%) Chrysler unit should have a restructuring plan ready by February as it aims to recover from a loss expected to be near US$1.3 billion for 2006, it said. Autos aside, a number of companies, including Bayer (BAY) (+0.24%), have agreed to pay the US government almost US$26 million to settle allegations of false weight loss advertising claims.
Merck (-0.98%) confirmed that its generics unit is up for grabs, but said it is not yet in talks with any potentially interested parties. It added that it plans a capital increase of €2 billion to €2.5 billion in the first quarter. Key on the broker front, Merrill downgraded Deutsche Boerse (-0.95%) to neutral and Deutsche cut AWD (-2.39%) to hold.
Elsewhere: The SMI index (+0.12%) was a touch above breakeven at mid-session Friday. Novartis (NVS) (+1.31%) was mentioned as a possible buyer of Germany-based Merck's generics pharmaceutical division, which, it has been confirmed, is on the chopping block. There was a positive new study for Herceptin, Roche's (+2.0%) breast cancer drug, in The Lancet.
In Milan both the S&P/MIB (-0.09%) and MIBTEL (+0.01%) indices traded flat.