Euro mixed in quiet trade

Tue, 06 May 2008

European share prices closed narrowly mixed Monday, with trade subdued as London was shut for a public holiday, dealers said.

They said a weaker showing on Wall Street as Yahoo lost ground after Microsoft dropped its bid for the Internet portal also dampened sentiment as did record oil prices above 120 dollars.

The spike in oil prices took the spotlight off a much better-than-expected US services sector report which had given a boost to the view that the worst of the recent turmoil may be over, with the US economy showing some resilience.

With London closed, the Cac 40 in Paris slipped 0.13 percent to 5063.36 points while in Frankfurt the Dax was up 0.13 percent at 7052.08 points.

The Euro Stoxx 50 index of leading European shares was off 0.14 percent.

The fact that Tokyo was closed too for a public holiday on Monday also made for a quieter Asian lead for European investors.

In New York, the Dow Jones Industrial Average was down 0.66 percent at around 4.30pm GMT as investors mulled Microsoft's failed Yahoo takeover attempt.

Dealers said, however, that underlying sentiment was more positive.

"The major indicators we track are suggesting that the rally from the January and March lows still has legs," said Todd Salamone, at Shaeffer's Investment Research.

"Speed bumps could occur along the way but we would view any pullbacks as buying opportunities," he said.

While Microsoft was up some two percent, Yahoo lost more than 16 percent.

In Paris, dealers voiced some surprise the market had not paid more attention to the news that the US ISM April service sector index had jumped to 52 in April from 49.6 in March, marking a return to growth.

However, one dealer said the data had not been completely unexpected and with London closed for a holiday, interest was muted.

EADS lost 3.82 percent to 16.38 euros after a report that its Airbus unit faced fresh problems with its flagship A380 super jumbo.

In Frankfurt, dealers said investors were waiting for the "storm" of company reports to begin on Tuesday, hoping to be reassured that earnings remain on track despite the recent financial market turmoil.

Elsewhere in Europe, Belgium's Bel-20 index was down 0.07 percent, Madrid's Ibex-35 added 0.10 percent, Italy's Mib-30 slipped 0.07 percent, the AEX in Amsterdam inched up 0.04 percent and the Swiss Market Index shed 0.10 percent.