EUROPE
Mixed fortunes in Europe
Posted Mon, 28 Jul 2008

European stock exchanges ended the week with mixed fortunes but were generally boosted by better than expected economic news from the United States.

In London the FTSE 100 index shed 0.18 percent to close at 5352.60, while in Paris the Cac 40 gained 0.67 percent to finish at 4377.18 points. The Frankfurt Dax slipped 0.06 percent to 6436.71.

The Euro Stoxx 50 index of leading eurozone companies fell 0.10 percent to 3351.13.

US stocks rebounded on Friday, boosted by better-than-expected data on orders for durable manufactured goods and new home sales.

The Dow Jones Industrial Average was up 0.26 percent at 11 379.24 in mid-day trade, coming back from a 2.4 percent slide on Thursday.

The tech-heavy Nasdaq composite gained 1.01 percent to 2303.18.

The Commerce Department reported orders for durable manufactured goods rose 0.8 percent in June, confounding expectations of a drop of 0.3 percent. That helped ease the pain of Thursday's dismal report on US home sales and suggested the economy was holding up.

Fred Dickson, analyst at DA Davidson & Company said Thursday's sell-off helped bring back bargain hunters.

"Market bulls have been waiting for a pullback to put money to work," he said. "This pullback will probably give them the chance to do just that. Today's better-than-expected durable goods order report for June was a very pleasant surprise. Maybe the economy is finally showing some signs of new life."

A separate report showed new home sales fell 0.6 percent in June but the pace was better than expected, at an annualized level of 530 000 units compared with forecasts for 505 000.

"New home sales look to be reaching a bottom and that is good news for everyone," said Joel Naroff at Naroff Economic Advisors.

In London the insurance sector weighed on sentiment after German re-insurance powerhouse Munich Re issued a profit warning on its 2008 results.

Legal and General fell 6.72 percent to 98.60 pence while Aviva shed 4.20 percent to 490 pence.

Companies active in the United States by contrast were in demand. British Airways, for example, rose 1.96 percent to 246.75 pence.

In Paris the Cac 40, after a wobbly start, rebounded on US economic news.

Construction group Saint-Gobain jumped 7.17 percent to 39.31 euros as investors focused on its positive first half results rather than its decision to lower operating targets for the year.

Electricity utility EDF rose 5.64 percent to 54.35 euros on an announcement by its British subsidiary EDF Energy of two sharp hikes in British energy prices.

Media group Vivendi fell 2.26 percent to 26.37 euros, having disappointed investors with first half sales results, which nonetheless rose 10.2 percent.

In Frankfurt re-insurer Munich Re shed 7.34 percent to 107.88 euros, taking Allianz down 4.60 percent to 109.13 euros.

Banks also suffered, notably Deutsche Bank, which lost 1.05 percent to end the week at 59.57 euros.

Elsewhere in Europe there were declines of 0.73 percent to 11 589.9 on the Ibex-35 in Madrid, 0.59 percent to 7016.03 on the Swiss Market Index, 0.01 percent to 28 661 on the SP/Mib in Milan, 1.53 percent to 3059.56 on the Bel-20 in Brussels and 0.22 percent to 395.77 on the AEX in Amsterdam.

Asian shares tumbled on Friday with Australia and India suffering heavy falls of more than three percent on fresh worries of US economic woe due in part to the country's ailing housing market.