Energy shares keep Europe afloat
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LONDON, England (Reuters) -- Energy firms helped European stocks stay afloat on Thursday, buoyed by a broker upgrade and higher crude oil prices, but Abbey National's massive loss and Nestle's disappointing results hampered gains.
Oil majors BP and Shell tacked on 2.0 and 2.3 percent each after JP Morgan upgraded the European energy sector to "overweight" from "underweight" and crude prices rose on supply concerns.
Shell also gained on news that two units at its 340,000 barrel-per-day refinery at Deer Park, Texas, returned to normal after a glitch over the weekend cut production.
The energy sector, also boosted by gas and oil firm BG rose 1.66 percent to hit its highest since January 7.
Fresh bid speculation helped BG to a lifetime high. The stock ended up 4.0 percent.
For the second day running bank stocks were among major losers after Britain's second-biggest mortgage lender Abbey National posted a 2003 pre-tax loss of 686 million pounds -- nearly five times the loss expected by analysts.
Abbey National tumbled 11.8 percent.
Germany's second-biggest bank HVB shed 2.3 percent after it confirmed plans to raise at least three billion euros in a rights issue to absorb write-downs on investments that pushed it to its worst ever loss last year.
The FTSE Eurotop 300 index of pan-European blue chips closed up a shade at 1,008.25 points, down from a session high of 1,011.05. Amid good volumes the number of gainers to losers was roughly equal.
The narrower DJ Euro Stoxx 50 index added 0.39 percent to 2,883.54 points.
European stocks opened up, but U.S. durable goods data for January, down 1.8 percent against expectations of a 1.4 percent rise, saw the market lose steam in the afternoon session.
"The headline durable goods number was weak," said Matthew Wickens, economist at ABN AMRO. "If you strip out the volatile items like transport the numbers actually look quite good."
However, investors were encouraged by non-defense capital goods orders, excluding aircraft -- seen as a proxy for future business spending -- which rose 3.6 percent last month after a 3.8 percent gain in December.
In New York, the blue-chip Dow Jones industrial average was down 0.27 percent at 10,573.18 points, but the technology-heavy Nasdaq Composite Index was up 0.34 percent at 2,029.96.
Strategists said the dollar's bounce against the euro in recent days will eventually feed through to higher prices as investors opt for previously abandoned stocks such as auto and drug makers with large exports to the United States.
"The dollar looks unlikely to weaken much further and if we get more of a rebound then we will probably see new (stock market) highs," said Mike Lenhoff, chief strategist at Brewin Dolphin Securities.
"A dollar bounce against a background of historically low euro zone interest rates will lessen intentions to revise down earnings estimates further."
Last week the FTSE Eurotop hit a 19-month high of 1,019.34.
Around Europe, Britain's FTSE was up 0.19 percent at 4,515.9 points, France's CAC added 0.32 percent at 3,714.5 and Germany's DAX rose 0.31 percent to 4,007.8.
Zurich's SMI was one of the worst-performers in Europe with losses of 0.24 percent to 5,797.4 as Swiss-listed Nestle shed 3.2 percent.
Nestle, the world's biggest food group met its own targets with a 5.1 percent rise in underlying sales for 2003, but disappointed investors who were expecting a bigger increase.
Another blue-chip loser was Cap Gemini, down 8.8 percent after Europe's largest computer services firm disappointed investors with a vague 2004 outlook, which overshadowed a stronger-than-expected rise in 2003 operating profit.
On a positive note Adecco advanced 3.8 percent as fears over accounting difficulties at the Swiss employment firm eased. Adecco said its two biggest shareholders remained committed to the firm and that operations remained healthy.
Germany's Metro AG rallied almost 3.7 percent after Morgan Stanley upgraded the retail giant to "overweight" from "equal-weight" and set a price target of 42.99 euros on the stock.
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