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Europe cautious on Greenspan
LONDON, England (CNN) -- European markets were mixed Wednesday as comments by Federal Reserve Chairman Alan Greenspan failed to ease concern over the U.S. economy and cooled enthusiasm for better-than-expected earnings by German retail giant Metro. Weak U.S. manufacturing data and a negative start on Wall Street also pressured stocks in Europe. London's FTSE 100 slipped 0.1 percent to 3,926 and the CAC 40 blue chip index in Paris inched up 0.4 percent to 2,953.67, while Frankfurt's electronically traded Xetra Dax was up 0.8 percent to 2,931.18 in late trading (the German market was set to close at 1800 GMT). The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was down 0.2 percent. Traders said there was little activity Wednesday ahead of the Labor Day holiday. All European markets -- except for London, Lisbon and Dublin -- will be closed Thursday. But investors had plenty of economic and corporate news to digest Wednesday ahead of the trading break. Greenspan told the U.S. House Financial Services Committee the U.S. economy was poised for a rebound, but that the timing of that recovery was uncertain as businesses continued to show caution. (Full story) Those comments were reinforced by a survey from the National Association of Purchasing Management-Chicago which showed business in the U.S. Midwest contracted for a second consecutive month in April. (Full story) "I think people tend to get carried away in terms of how much data can improve now that the Iraqi war is over. This is forgetting that the U.S. economy is still struggling with some structural problems that are not going to be solved overnight,'' economist Hubert de Montvalon from French broker OddoPinatton, told Reuters. "The end of the geopolitical worries will of course help boost economic growth a little, but the U.S. economy remains in a soft growth momentum and I cannot yet see when stronger growth will be possible.'' European investors found reason to cheer Wednesday, thanks to Germany's Metro (FMEO), Europe's third largest retailer. Its shares were up 9.4 percent to 24.66 euros in late Frankfurt trading after posting earnings before interest and tax of 22.2 million euros. It stuck by its previous full-year targets. Cap Gemini (PCAP), the continent's biggest computer services company, rose 3.3 percent to 27.60 euros after posting a better than expected 10 percent fall in first-quarter revenue. However, Europe's second-biggest chip maker Infineon (FIFX) was down 5.9 percent to 6.60 euros in late Frankfurt trading after saying it would raise 725 million euros via a convertible bond. The AEX index in Amsterdam was down 0.4 percent, while Milan's MIB30 index gained 0.1 percent and the SMI in Zurich rose 0.7 percent. In the U.S. on Wednesday, stocks were little changed in early trading after a negative start. Investors regrouped after a weak reading on manufacturing activity in the Chicago-area and Fed Chairman Alan Greenspan's comments on the state of the economy. At 1530 GMT, the Dow Jones industrial average was down 6.44 points to 8496.55 and the Nasdaq composite lost 3.88 points to 1467.42, while the S&P 500 index gained 0.49 points to 918.33.
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