Mixed Earnings Weigh Europe Down

Ivaylo
31 Jul, 2006
Frankfurt

Dutch bank ABN Amro reported record-breaking second-quarter earnings, while Statoil fell, posting disappointing results and its stock slipped. By mid morning, London FTSE 100 shed 0.3%, while Frankfurt Xetra Dax lost 0.2%, and in Paris, the CAC 40 dropped 0.2%.

[R]6:30AM Europe falls slightly on mixed earnings results.[/R]
European markets fell slightly by mid morning. London’s FTSE 100 slipped 0.3% to 5,958.9, while Frankfurt’s Xetra Dax shed 0.2% to 5,694.92 and in Paris, the CAC 40 fell 0.2% to 5,020.58. On the corporate front, Dutch banking group ABN Amro Holdings dropped 2.8% after saying that provisions for bad loans soared to 430 million euros in the second-quarter, from 62 million euros a year ago, largely due to rising provisions for consumer loans. Profit climbed 23.2% to 1.22 billion euros ($1.55 billion).

U.K. media and publishing group Pearson advanced 1.9% after its adjusted operating profit gained 57% to 73 million pounds, helped by its Penguin book publishing arm and the FT Group. Spanish infrastructure firm Ferrovial, haiving recently won a bid battle to buy British airports operator BAA, announced Monday that it advanced 2.1% after reporting first-half net profit rise of 19.8% to 237.4 million euros ($302.8 million).

Dutch delivery services group TNT gained 3.4% after raising its margin guidance for 2006 and saying it expects to sign an agreement to sell its Logistics division before the end of the third quarter.

Oil prices gained 10 cents in electronic trading to $73.34 a barrel as unrest continued over the weekend in the Middle East. Gold gained London where the precious metal for immediate delivery advanced $2.13, or 0.3%, to $636.88 an ounce.

The euro was flat against the dollar Monday, holding gains it made at the end of last week after data showed a sharp slowdown in U.S. economic growth. The European currency bought $1.2753 in early European trading, unchanged from its level in New York late Friday. The British pound edged down to $1.8629 from $1.8634. The dollar dipped against the Japanese currency, falling to 114.34 yen from 114.70 yen.

[R]5:00AM Volatile trading reduce gold prices to humble gains.[/R]
The benchmark December gold contract closed $2.30 higher at $647.80 an ounce. Silver futures remained quiet throughout the session with the most-active September contract trading in a short range of $11.32 an ounce to $11.45 an ounce. The contract later closed at $11.365 an ounce, down 2.5 cents on the day.

October platinum ended $8.30 lower at $1,233.70 an ounce. For palladium, the benchmark September contract settled $6.30 lower at $314.15 an ounce. The most-traded September copper contract gained 7.05 cents to finish at $3.5490 per pound. The September crude oil contract shed $1.30 to close at $73.24 a barrel, after falling as low as $72.80. August gasoline, which is due to expire as the front-month contract Monday, ended 6.25 cents lower at $2.2335 a gallon.

On the New York Board of Trade, Arabica coffee futures hit 2-week highs, with the front month nearing but not reaching the $1 a pound mark as funds covered shorts and bought and stops were sparked, prompted by a rally in the London robusta market. October futures on raw sugar in foreign ports closed 0.01 cent lower at 14.76 cents a pound.