From Standard & Poor's European MarketScope
In the US, the Empire State manufacturing index was due. Wall Street was seen opening higher, with Intel's (INTC) fourth quarter earnings in focus. WTI was lower at US$52.70 a barrel, hitting oil stocks.
UK: The FTSE 100 index turned flat at midday amid reports that the December inflation rate rose to 3%, as expected among some quarters in the market, after the BoE's surprise rate hike by a quarter-point to 5.25% last week. The pound was at US$1.9671. A report in the afternoon by James Baker, the former US secretary of state, is expected to blame BP (BP) (-0.18%) for safety failings at its US operations. Oil and mining were the worst performing sectors.
In company updates, Britain's biggest retailer Tesco (+0.18%) dished out a forecast-beating 5.9% rise in UK like-for-like Christmas sales, nurtured by its Finest range and organic food. Miner Lonmin (-1.42%) was marked lower after it said it will rebuild its Number 1 furnace completely and will spend US$6.5 million in doing so.
In other news, British Airways (BAB) (-1.01%) is to meet unions today in an attempt to head off a cabin crew strike. Vodafone (VOD) (-0.50%) is considering buying Hutchison Whampoa's large HTIL stake as a way to win control of Hutchison Essar, according to the WSJ. Smiths (+4.39%) gained on broker upgrades after its GE (GE) deals.
Germany: The Xetra-Dax index (-0.08%) hovered around breakeven at mid-session Tuesday. In Frankfurt, the ZEW index has improved markedly, coming in at -3.6 vs. -19.0 in December and a forecast -10.0 reading. On the corporate news front, DaimlerChrysler (DCX) (-0.4%) sees the trucks market sharply weaker in the NAFTA and Japan regions this year, but recovering next year. MAN (+1.13%) is looking at other acquisitions, Scania apart. It is reportedly eyeing Navistar, Iveco or Isuzu.
Continental (+0.49%) reiterated its 2006 targets of about €15 billion in sales and higher EBIT. Postbank (+1.72%) said it still aims to reach a pretax profit ROE of above 20% in 2008 and a cost/income ratio below 63%. SAP (SAP) (+0.2%) announced the next version of its SAP All-In-One software for mid-sized companies.
Siemens (SI) (+0.36%) expects double-digit growth at its oil and gas business. Meanwhile, on the broker front, Credit Suisse downgraded the European capital goods sector to underweight from market weight, after six years of relative out performance by the sector, it explained. A court recommendation paved the way for Mobilcom's (-0.97%) tie-up with freenet.de. Kepler said the focus on operational business should allow a regaining of momentum to be reflected in higher earnings growth.
France: The CAC 40 index (-0.10%) continued to trade lower at mid-session. Pernod Ricard (+2.96%) bubbled up on news that Belvedere (+0.15%) plans two acquisitions this year to expand into the spirits industry, Le Figaro reported. Intel Corp. may enter a joint venture with STM (STM) (+2.18%) and a private investor that will reorganize its flash memory division, the Jerusalem Post reported.
Vinci (-0.67%) and Macquarie Bank are among bidders for Apcoa Parking AG, Europe's largest car parking company by number of spaces, wrote the FT. EDF (+0.66%) confirmed that it has reached a price accord with industrial users. Among those reporting, Safran (+6.16%) posted fiscal 2006 sales of €11.256 billion, +6.4%. Renault's (-0.65%) 2006 European car sales fell 11% to 1.32 million units.
PSA's (-0.83%) 2006 European car sales fell 2.1% to 2.02 million units. Soitec (-14.22%) tumbled after it warned that fiscal 2006 sales would not meet targets. S&P lowered its long-term corporate credit and senior unsecured debt ratings on TF1 (-2.69%) to A- from A and its short-term corporate credit rating to A-2 from A-1. Canal Plus (+0.89%) plans to cut 364 jobs or 9.5% of the workforce, according to La Tribune. SocGen upgraded Valeo (+2.90%) to buy from sell.
Elsewhere: The SMI index was flat ahead of the US opening bell, with breadth negative at 7-5. Credit Suisse (+0.35%) and UBS (+0.13%) benefited from higher price targets at JP Morgan. In addition, Dresdner Kleinwort is raising its target on Credit Suisse.
Stockholm joined Helsinki on positive ground, while Oslo traded a tad lower. Copenhagen was flat.