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Europe stocks claw upwards
LONDON, England (Reuters) -- Blue-chip European shares bounced off six-year lows and mostly ended higher Thursday, tracking gains on Wall Street after robust U.S. durable goods data and easing U.S. security concerns helped offset nagging war worries. Recent heavy fallers such as British engineering firm InvensysFrench utility SuezGerman drugs maker Bayer and scandal-tainted Dutch retailer Aholdled the blue-chip climbers. French insurer Axa also rose after a robust set of earnings, together with Swiss peer Zurich Financial as investors bet on a better 2003 after a dreadful 2002. But broader sentiment remained fragile as the prospect of a U.S.-led war in Iraq continued to loom large for markets, with investors awaiting Baghdad's response to a U.N. order to destroy some of its missiles and Turkey delaying a vote that would allow U.S. troops to be deployed on Iraq's northern border. "This is not the start of a new improved trend -- it's not built on concrete," said a senior dealer in European stocks. London also bucked the positive trend, with heavyweight stocks such as Lloyds TSBVodafoneand AstraZeneca leading the way down amid talk of options-related selling by an insurer. The FTSE Eurotop 300 indexof pan-European blue chips was 0.93 percent higher at 754.93 points, having closed at its lowest level since January 1997 on Wednesday, while the narrower DJ Euro Stoxx 50 index jumped 2.21 percent to 2,104.41 points. Trading volumes were slightly above average and rising stocks outpaced fallers by less than two to one. The gains mimicked similar rises on Wall Street, with the Dow Jones industrial average up 1.1 percent as traders there cheered a decision by U.S. officials to lower the assessment of terror risks, having three weeks ago raised it to its second-highest level. The tech-laden Nasdaq Composite jumped 1.4 percent. Earlier data showed new orders for U.S. durable goods in January rose by a higher-than-expected 3.3 percent after a decline of 0.4 percent in December. "The numbers may be telling us that there is an improvement beginning in the capital goods area but we need another three/four months of data before we can call it a trend," said Jim Glassman, senior U.S. economist with JP Morgan in New York. Axa impressesAxa, France's largest insurer, surged 6.7 percent after posting an 82 percent rise in 2002 profit, but the company sliced its dividend. Zurich Financial leapt 11.4 percent on hopes for a better 2003 after Europe's fifth-largest insurer slashed its dividend and posted a widely expected $3.4 billion net loss, drawing a dismal 2002 to a close. Battered Dutch group Ahold jumped more than 25 percent after the world's third-biggest retailer said it had completed an investigation into the accounts of its Argentine business and found nothing that would hurt its earnings. The shares are nonetheless still down more than 64 percent so far this week, after Ahold unveiled major accounting irregularities on Monday. Meanwhile, HVB sank 10.4 percent as investors took fright at a report which said it was mulling a convertible bond issue worth up to four billion euros, despite denials to the contrary from Germany's second-biggest listed bank. Swiss industrial group ABB slumped 12.1 percent after reporting a record 2002 loss after charges for settling asbestos liabilities and for job cuts, with the group also confirming it would pay no dividend for 2002. Nestlethe world's biggest food group, fell 1.9 percent after reporting 2002 profits that rose 13 percent, but core sales growth failed to reach its target. Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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