Mixed bag for European stocks

Trader takes buy orders at Frankfurt Stock Exchange

LONDON, England (CNN) -- European markets ended mixed on Wednesday after a flood of stock downgrades -- mostly in the telecom and tech sectors -- and a negative start on Wall Street.

London's FTSE 100 edged up 0.2 percent to 5,083, while the CAC 40 blue chip index in Paris slipped 0.1 percent to 4,334.85 and Frankfurt's electronically traded Xetra Dax was down 1 percent to 4,871.58 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, was down 0.3 percent, with the information technology, computer and insurance sub-indices leading declines.

Mm02 (OOM), Europe's fifth-largest mobile phone operator, disappointed the markets with its first set of full-year figures, as investors focused on flat growth in its core UK business despite solid group earnings. (more) Its shares plunged 11.9 percent to 42.31 pence in early afternoon trading in London.

Nokia, the world's biggest mobile phone maker, fell 2 percent to 14.95 euros after UBS Warburg cut it price target for its shares to 20 euros from 24 euros but maintained its "buy" rating. Rival Ericsson dropped 2.6 percent to 22.70 euros.

Vodafone (VOD), Europe's biggest mobile phone operator, rose 2.9 percent to 105 pence, extending the previous sessions gains, after it posted a $25 billion loss on Tuesday, but the results were at the top end of expectations. (more)

France Telecom (PFTE) was up 2.7 percent to 22.19 euros, also extending the previous session's gains, after the company said it was not considering plans to issue more shares to cut debt and was working towards a solution to buy MobilCom, without taking on the German mobile company's debt. (more)

However, Deutsche Telekom (DTE) was down 4.5 percent to 12 euros in late Frankfurt trading. On Tuesday, the group said it would cut 22,000 jobs -- nine percent of its workforce -- by the end of next year to slash costs and pull the telecommunications giant out of debt. (more)

ARM Holdings (ARM), Europe's biggest chip designer, was another big loser in London, falling 7.2 percent to 182.51 pence. UBS Warburg told investors to "sell" the stock and said it expects the stock to trade at 150 pence.

French chipmaker STMicroelectronic (PSTM) lost 3.3 percent to 30.08 euros after it repeated its forecast for a 10 percent rise in second quarter sales. Software group Dassault Systemes (PDSY) fell 2.6 percent to 45.56 euros. At its annual general meeting on Tuesday, the company confirmed a 2002 growth target for sales and a 30 percent operating margin.

French IT consultancy Cap Gemini (PCAP) lost 2.3 percent to 53.55 euros.

German reinsurer Munich Re (FMUV2) was down 3 percent to 253.40 euros in late Frankfurt trading after Deutsche Bank said it had cut its stake in the company and analysts cut earnings forecasts over concern about its U.S. unit's reserves. (more)

Air France (PAF), Europe's third-largest airline, rose 0.7 percent to 18.35 euros after managing to post better-than-expected financial results late on Tuesday, riding out the downturn in air travel following the terrorist attacks in the United States. (more)

Rival Lufthansa (FLHA) was down 1.9 percent to 14.71 euros and British Airways (BAY), Europe's largest airline, fell 2.8 percent to 208 pence.

In the media sector, the world's second-largest media company Vivendi Universal (PEX) slipped 0.2 percent to 33.74 euros as a crucial board meeting was set for New York where Chief Executive Jean-Marie Messier was expected to outline the partial sale of its stake in water utility Vivendi Environnement to cut debt. (more)

GUS (GUS), which owns the Argos catalogue chain, jumped 6.3 percent to 655 pence after announcing it plans to partially float its fashion house Burberry in July. (more)

Also higher was Germany's Preussag (FPRS), Europe's largest travel group. It was up 0.5 percent to 28.25 euros in late Frankfurt trading after it posted a first quarter loss that was less severe than analysts had forecast and said it expected to come close to matching last year's full year operating profit. (more)

Italian carmaker Fiat was basically flat in Milan after creditors agreed to support a 3 billion euro capital increase and buy control of the financial services unit of loss-making Fiat Auto division. (more)

In Amsterdam the AEX index slipped 0.1 percent, while Milan's MIB30 index lost 0.3 percent and the SMI in Zurich was up 0.2 percent.

In the U.S. on Wednesday, chip and telecom stocks slid in early trading as investors, who continue to show concerns over slowing demand, unloaded shares in Novellus Systems, JDS Uniphase and Ericsson.

At midday, the Dow industrials was down 40 points, or 0.4 percent, to 9,941, while the Nasdaq composite was off 19 points, or 1.2 percent, at 1,632.