Europe closes mixed

August 23, 2001 Posted: 1630 GMT

LONDON (CNN) -- Europe's major bourses ended mixed Thursday as investors digested a report that growth in Germany had ground to a halt.

The economic standstill in Germany, Europe's biggest economy, reflected output and investment cutbacks by companies suffering from excess inventory amid a global economic slowdown, according to the report from the Federal Statistics Office.

But tech stocks and some upbeat earnings reports helped offset the gloom.

Frankfurt's late-trading Xetra Dax recovered slightly following earlier falls, rising 0.6 percent to 5,252.23, while London's FTSE 100 closed 0.2 percent lower at 5,396.5. The CAC 40 index in Paris ended slightly down at 4,809.5.

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In Frankfurt, Europe's leading travel operator, Preussag, topped the gainers, rising 4.8 percent after announcing it had more than doubled its net profit in the second quarter, beating analysts' expectations.

Deutsche Telecom (FDTE) rose 2.7 percent while automakers DaimlerChrysler (FDCX) and Volkswagen (VOWG) climbed 2.4 and 2 percent respectively.

Infineon Technologies (FIFX), Europe's second-largest maker of semiconductors, advanced 1.9 percent.

German drug maker Bayer (FBAY) led the losers in Frankfurt, falling more than 2 percent after saying it is withdrawing its Baycol cholesterol-lowering drug from Japan, dealing a further blow to 2001 profits.

Baycol already had been pulled from the market in all other countries where it was on sale after reports linked it to some 52 deaths.

Franco-German drug maker Aventis (PAVE) slid 1.2 percent on reports it would swap its agrochemical unit for Bayer's drug division. Bayer is in talks to buy the Aventis arm, but Aventis denied it is thinking about swapping businesses.

Business telecom service provider Colt Telecom (CTM) led the losers in London, falling 9.7 percent followed by beleaguered telecoms equipment company Marconi (MONI) down 9.8 percent.

Cable operator Telewest Communications (TWT) ended 5.1 percent lower.

British Telecommunications (BT-A) fell 1.7 percent on news that UK regulator Oftel had taken action against the company to try to boost competition for high-speed Internet services.

In Paris, the CAC 40 index France Telecom (PFTE) led the losers, closing 4.7 percent on news it would have to pay for 3,000 layoffs at its subsidiary Equant, an operator of high-speed data networks.

Orange (PORA), France Telecom's separately listed mobile-phone subsidiary, also fell 1.4 percent.

French TV broadcaster TF1 (PFTI) lost 2.4 percent.

ST Microelectronics (PSTM), Europe's largest chipmaker, rose 2.5 percent after figures from Semiconductor Equipment and Materials International, a trade group of suppliers to the microprocessor industry, showed chipmakers placed $764 million in orders in July, up from $727.5 million in June.�

Information technology shares also were helped by hopes that the European Central Bank may cut interest rates to stimulate growth in the 12 nation that form the euro zone. The ECB has trimmed rates just once this year, placing its emphasis on trying to rein in an inflation rate that had risen above its target.

The information technology sector was up 2.3 percent on the FTSE Eurotop 300, a broader index of the region's largest stocks, which rose 0.2 percent. The telecom sector was off 0.3 percent.

In Amsterdam, the AEX index climbed 1.3 percent, while the SMI in Zurich lost 0.6 percent. Milan's MIB30 index rose 0.2 percent.

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Uncertain trading dominated Wall Street at midday Thursday as traders sought out select technology bargains but opted to cash in on some of the recent gains in manufacturing issues

Just ahead of midday trading, the Nasdaq composite index had gained 10.98 to 1,870.99, while the Dow Jones industrial average fluctuated before heading lower, falling 31.42 to 10,245.41.

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