Europe posts small gains

June 8, 2001
Web posted at: 1606 GMT

LONDON (CNN) -- European markets gave up much of their earlier gains by Friday's close, with prices dampened by a weak opening on Wall Street.

Chip shares had been all the rage earlier following bellwether stock Intel's overnight announcement that its second-quarter earnings would come in close to expectations.

But then telecom equipment maker Juniper Networks warned on Friday morning that its second-quarter results would be well below Wall Street forecasts, sending shares into reverse. Network equipment supplier Ericsson took one of the biggest hits, falling more than 3 percent.

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London's FTSE 100 was virtually unchanged, just 2.3 points higher at the close at 5,950.6, with chip designer ARM Holdings (ARM) still gaining 2.5 percent. But telecom testing equipment maker Spirent (SPT) lost 8.9 percent and another Internet hardware firm, Marconi (MONI), was down nearly 4 percent.

In Paris, the CAC 40 blue chip index was pegged back to a gain of 0.3 percent by the close at 5,439.93, with Europe's biggest chip maker, STMicroelectronics (PSTM), up 1.1 percent.

Frankfurt's electronically traded Xetra Dax was 0.3 percent higher in late trading at 6,200.05. Europe's biggest business software company, SAP (FSAP), rose 1.1 percent and the region's No. 3 chipmaker, Infineon Technologies (FIFX), topped the blue chip index, rising 3.7 percent.

Amsterdam's AEX suffered technical problems and a halt to trading lasting more than three hours. Semiconductor maker Philips Electronics and chip equipment maker ASM Lithography rose 0.9 and 2.1 percent respectively.

The SMI in Zurich ended down 0.5 percent but Milan's MIB30 index finished 0.8 percent higher.

The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was 0.3 percent lower, with the computer services sub-index up 0.9 percent but the information technology index, 2 percent higher earlier, down 1.2 percent.

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The Nasdaq composite index fell 41.8 points, or 1.8 per cent, by mid-morning in New York to 2,222.2, while the Dow Jones industrial average lost 36.7 points, or 0.3 percent, to 11,054.04. But a system failure brought trading to a halt for 80 minutes in the first such major incident in more than two years.

In the currency market, the euro edged lower against the U.S. dollar to 84.92 cents from 85.02 cents in late New York trade on Thursday.

The currency under most pressure was the pound, which hit fresh 15-year lows after Labour won a landslide victory in Thursday's general election. The pound fell to $1.3775 in early trade, before staging a recovery to $1.3816.

London-listed Irish telecoms company Eircom (EIR) rose 2.2 per cent on news of improved offers from two rival consortia bidding to take over the former monopoly.

Department store group Bentalls (BENT) was up 11.4 percent after saying it was in talks that could lead to it being acquired by an unnamed company.

Shares in online games retailer Gameplay (GAM) fell 25 percent to just 3 pence after its announcement that most of its 80 staff were being laid off and it may not be able to sell off any more of the company.

In Frankfurt, shares in Lufthansa (FLHA) were 1.1 percent lower after the pilots' union said it had finally settled its dispute with the airline and investors pondered the impact pay rises would have on earnings.

In Paris, electrical equipment maker Schneider Electric (PSU) fell 1.9  percent as it improved its takeover bid for peer Legrand.

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