Europe gets a boost from Alcatel

Traders at the London Stock Exchange

LONDON, England (CNN) -- European markets ended higher on Monday following reassuring earnings comments from two of the world's biggest telecoms groups.

Alcatel (PCGE), Europe's fourth-largest telecom equipment maker, jumped 5.8 percent in Paris after it said first-quarter sales and operating losses would be in line with expectations.

In the U.S., fibre-optic cable giant Corning said its quarterly results would beat Wall Street expectations.

London's FTSE 100 rose 0.8 percent to 5,201.4 and the CAC 40 blue chip index in Paris gained 0.8 percent to 4,502.49, while Frankfurt's electronically traded Xetra Dax was up 0.2 percent to 5,204.99 in late trading (the German market was set to close at 1900 GMT).

The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, added 0.6 percent, with the information technology, computers services and telecoms sectors among the top gainers. Auto stocks were also strong on Monday.

Among the telecoms stock benefitting from Alcatel's positive comments was Nokia, the world's biggest mobile phone handset maker, which rose 2.4 percent ahead of its earnings report on Thursday. Swedish rival Ericsson, the biggest supplier of mobile phone infrastructure, added 1.8 percent.

Vodafone (VOD), the world's biggest mobile phone operator, which fell more than 18 percent last week to it lowest level in four years, rose 4.8 percent to 114.61 pence as investors jumped in to buy the stock at a bargain price.

Mmo2 (OOM), which was spun off from BT Group last year, was the top gainer in London, rose 3.9 percent as the mobile operator also recovered from big losses last week. France Telecom (PFTE) gained 1.3 percent, while French mobile company Orange (ORA) was up 1.2 percent.

German software giant SAP (FSAP) was up more than 1 percent in late Frankfurt trading. Earlier on Monday, Dresdner Kleinwort Wasserstein raised its recommendation on the stock to "add" from "hold" and also raised its price target to 160 euros from 148 euros. The investment bank said the upgrade was due to expectations of a higher market share and improved margins.

But ARM Holdings (ARM), Europe's biggest chip designer, fell 8.2 percent after reporting lower than expected royalty payments in the first quarter. ARM, which earns money from licensing designs and royalties for the use of semiconductors in mobile phones, handheld computers and cars, said revenue from royalties fell 6 percent to £6.4 million.

In Amsterdam the AEX index climbed 0.4 percent, while Milan's MIB30 index and the SMI in Zurich both gained 0.3 percent.

In the U.S. on Monday, the tech sector slipped despite Corning's upbeat earnings outlook, while blue chips were dragged lower by a disappointing financial reports from such heavyweights as Citigroup.

At midday, the Nasdaq composite index was down 1.6 points, or 0.1 percent, at 1,754.6, while the Dow Jones industrial average fell 71.2 points, or 0.7 percent, to 10,119.62.