European Indexes Sink
From Standard & Poor's European MarketScope
Europe's major indexes dropped to begin the week. Investors remained nervous about US growth after Friday's data release showed US third quarter GDP came in at its weakest level in more than three years. Wall Street was seen opening lower ahead of Sept. personal income and consumption data and the core PCE index. Nymex crude went below US$60/bbl on fund selling due to ample supplies.
Germany: The Xetra-Dax index (-0.62%) remained lower at mid-session Monday as In Frankfurt, FAZ wrote that Commerzbank (-0.21%) is considering taking part in the buying of DaimlerChrysler's (DCX) (-0.25%) stake in EADS. DCX, meanwhile, is studying the sale of its Chrysler unit, according to Der Spiegel. Continental (+0.69%) expects higher revenues and operating profit this year, despite rising raw material and energy prices. In another development, CFO Alan Hippe saw his contract extended by five years to 2012. His current contract expires next year.
Deutsche Telekom's (DT) CEO (-0.81%), Kai-Uwe Ricke, will see his contract renewed for three years rather than the usual five-year period, according to WirtschaftsWoche. Depfa (-1.49%) tabled third quarter net income of €110 million, below expectations, with quarterly net interest income flat year-over-year at €101 million. The broader market-listed bank is raising its dividend payment to €0.40 per share.
MPC (+1.49%) has raised its 2006 earnings forecast after the sale of 99 Dutch properties. Pfleiderer (-0.14%) is mulling cutting up to 860 jobs in Germany, wrote Die Welt. Qiagen (-1.18%) is buying Genaco Biomedical Products Inc. for US$22 million in cash plus 125,000 of its shares and milestone payments of up to US$18 million. Drillisch (-1.8%) plans to double its stake in Mobilcom (-2.72%).
UK: The FTSE 100 index slipped lower at mid-session. However, Standard Life (+2.30%) bucked the trend on reports of a £7 billion bid from French insurance giant AXA (AXA). Publisher Pearson (PSO) (-1.34%) posted a 15% rise in underlying profits for the first nine months of 2006 and said trading was in line.
Copper miner Kazakhmys (-0.74%) reported a 9% rise in third quarter copper cathode production. Confectionery group Cadbury (-2.05%) maintained its 3%-5% revenue growth target for 2007 and beyond. In other news, Hanson (+0.91%) rose on a bullish note from house broker ABN Amro and on Australian firm Rinker's rejection of a Cemex bid offer. Utilities continued to gain from news of Morgan Stanley's plans to invest US$3 billion in the carbon trading market.
Glaxo (GSK) (-1.28%) is reportedly in talks with the government on bird flu vaccinations. From the weekend press: a consortium led by Qinetiq (+4.38%) is poised to pip BAE (-0.78%) to win a £10 billion-plus MoD contract, The Sunday Telegraph said. ITV (-1.17%) is planning a bid for SMG (+5.80%), the Mail on Sunday reported.
France: The CAC 40 index (-0.94%) continued to trade deeply in the red at mid-session. M&A news filled the headlines. Schneider (-5.25%) plunged after shares resumed trading. Schneider offered US$6.1 billion in cash to buy American Power and some analysts consider the price as expensive. Carrefour (-1.97%) is ready to make acquisitions in China in order to strengthen its presence in some of China's 45 to 50 main cities, Les Echos reported.
Axa (AXA) (-1.27%) is mulling a £7 billion approach for Standard Life after being rebuffed by Scottish Widows, The Sunday Express said. EADS (-1.21%) wants to strengthen its ties with Italian defense company Finmeccanica, Les Echos wrote. Lagardere (-0.80%) ended takeover talks with Switzerland's Valora and said it won't make a hostile offer.
Air France-KLM (AKH) (-0.73%) is the Italian government's top choice as a partner for Alitalia as Italy seeks partnerships for the state-controlled company, La Stampa said. On the upside, investors in Suez (SZE) (+0.65%) will get a dividend payment, worth €5 billion, to complete the €40 billion merger with GDF, The Sunday Telegraph reported. Suez will release its nine months sales today after the close.
Elsewhere: The SMI index (-0.76%) remained firmly in the red with breadth a negative 24-2. Panalpina (+2.15%) was a rare gainer after reporting a better-than-expected 44% rise in nine months net profit.
Dutch stocks remained firmly in the red as well.