Glaxo erodes European gains
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LONDON, England (Reuters) -- Europe's blue-chips hit new 17-month highs before reversing to end little changed on Thursday, as a gloomy 2004 earnings outlook from GlaxoSmithKline and U.S. economic data weighed.
On a brighter note, Unilever rose 2.5 percent after the world's third-largest food group said it would shift to a greater focus on share buybacks and dividends to boost shareholder returns.
Meantime Rolls-Royce Plc rocketed 15.0 percent. The world's second largest manufacturer of military and civil aircraft engines beat forecasts with an 11.8 percent rise in year pre-tax profits and gave a bullish outlook for earnings in 2004.
Europe's biggest drugmaker GlaxoSmithKline missed consensus forecasts for 2003 earnings and said generic competition to two antidepressants could wipe out growth this year. Its shares slipped 3.7 percent.
The company said earnings had been dragged down by the weaker dollar, which hit other European health firms that export to the United States, the world's biggest market for drugs.
Domestic peer AstraZeneca gave up 1.2 percent, France's Sanofi-Synthelabo lost 1.7 percent and Swiss rival Roche shed 1.4 percent.
The FTSE Eurotop 300 index ended a touch lower at 995.40 points, down from a session high of 1,002.97, the highest since August 27, 2002. Amid good volumes the ratio of losers to winners was roughly equal.
The DJ Euro Stoxx 50 index gained 0.19 percent to 2,896.25 points.
Strategists said European equities opened up on Thursday after Federal Reserve Chairman Alan Greenspan had calmed jitters about early U.S. interest rates hikes.
"That worry has faded and will be a helpful driver going forward," said Jason James, global strategist at HSBC. "There's also a pick-up in M&A activity in the United States and Europe, which is positive."
In New York, the blue-chip Dow Jones industrial average was down 0.3 percent at 10,705.62 points and the technology-heavy Nasdaq Composite Index was down 0.29 percent at 2,083.53.
Sentiment was sapped by weak U.S. jobless claims for last week at 363,000, and January retail sales which fell 0.3 percent after a rise of 0.2 percent in December.
"It could be bad news for (February) non-farm payrolls," said a trader. "Questions about the sustainability of U.S. economic growth could reemerge, that would hurt stocks everywhere."
Across Europe, Britain's FTSE ended 0.42 percent lower at 4,377.7 points, Germany's DAX was little changed at 4,121.65, France's CAC gained 0.1 percent to 3,681.56 and the Swiss SMI shed 0.60 percent to 5,846.7.
In the banking sector, trio Societe Generale, Credit Suisse and Barclays posted profit improvements, but left investors unimpressed after strong share price gains over the past months.
Credit suisse slid 5.1 percent after Deutsche Bank downgraded it to "hold" from "buy," Societe Generale ceded 3.0 percent and Barclays slipped 3.9 percent.
Elsewhere the world's biggest maker of home appliances Electrolux tumbled 7.5 percent after it beat the consensus for fourth-quarter profits, but forecast a single-digit fall in 2004 earnings.
French heavy engineering firm Alstom jumped 11.3 percent after a report in a Hong Kong paper said it had clinched a multi-billion-dollar contract in China.
British internet retailer Lastminute.com added 13.0 percent on news of a narrower first-quarter loss and a good start to the second quarter.
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