Europe rattled by U.S. data
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LONDON, England (Reuters) -- European stocks fell on Friday as the week's push to 18-month highs was scuppered by shaky U.S. data and nagging doubts over earnings, while Vodafone recovered some ground ahead of its possible $35 billion bid battle.
European drug leader GlaxoSmithKline and Swiss bank CS Group eased for a second day as a slew of analysts downgraded the two groups, which released results on Thursday that raised concerns among investors.
French reinsurer Scor on Friday showed a 26 percent slide in 2003 sales, sending its shares down 8.5 percent.
Results and outlooks from German steel group ThyssenKrupp and Swedish bank SEB were better, however.
"Overall, the results don't seem to be too bad to me ... but the problem is the downgrading to 2004 estimates that is creeping in,'' said Nicholas Williams, a European fund manager at Singer & Friedlander Asset Management.
The FTSE Eurotop 300 index closed down 0.2 percent at 993.39 points.
For the week, the index was up one percent after briefly straddling the 1,000-point mark for first time since August 2002, but investors seemed reluctant to push benchmarks too far, fearing that much of the good news coming from companies is already priced into shares.
"I would not be surprised to see a little bit of caution returning to the market,'' Williams said.
The narrower DJ Euro Stoxx 50 index dropped 1.2 percent to 2,860.88 points.
Worrying U.S. data
European shares were steady until confronted with two sets of U.S. figures that soured the mood and sent Wall Street lower in early trading.
The U.S. trade deficit widened more than expected in December to $42.48 billion, suggesting that the dollar's recent slide has failed to help narrow the gap by discouraging imports. Prices of imports in January also rose sharply.
Meanwhile, the University of Michigan's preliminary reading of U.S. consumer sentiment tumbled to 93.1 in February from January's final reading of 103.8, showing that people were cautious about the economy.
"It's unambiguously bad for stocks as too much demand is being met by foreign goods, and consumer sentiment took a big turn for the worse, though we think it was seasonal,'' said Steven Barrow, a strategist at Bear Stearns investment bank.
"It's a clear message for the dollar that it will go down.''
Barrow said it was difficult to square the Michigan index and bulging trade deficit with the upbeat message on U.S economic growth delivered by Fed Chairman Alan Greenspan earlier in the week.
The trade deficit implied that one percent needed to be lopped off the fourth-quarter gross domestic product estimate for the United States, Barrow said. This week the greenback was back near its record low against the euro.
Vodafone eyed
Vodafone, the world's largest mobile phone firm, rose 2.8 percent to 136 pence, helping to ensure that London was among the few bourses to advance on Friday.
Vodafone and U.S rival Cingular Wireless were poised for a head-to-head battle over struggling AT&T Wireless of the U.S. Bids were to be submitted by 2200 GMT on Friday.
Meanwhile, basic producers rallied as Anglo-Dutch metals group Corus jumped 4.2 percent, boosted by bullish first-quarter results from German rival ThyssenKrupp, whose shares fell 2.6 percent.
Arcelor, the world's biggest steel group, rose 1.3 percent. Corus was also lifted by news the stock has been added to an MSCI share benchmark tracked by many investors.
Mining companies rose, with Anglo American up 1.7 percent and Xstrata up 2.3 percent, amid bid speculation in the sector and hopes that China's insatiable demand for raw materials will remain undimmed.
When European bourses shut, in New York the Dow Jones industrial average was off 0.45 percent at 10,643 points, weighed down by the weaker Michigan consumer index.
The Nasdaq Composite fell 0.7 percent to 2,057 points.
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