Europe loses steam on U.S. data

European markets rebound after Wall Street rally

LONDON, England (CNN) -- European markets staggered to a close on Friday as early gains were eroded after weak U.S. consumer data rekindled fears of a slow economic recovery.

Markets on both sides of the Atlantic turned mixed after the closely watched University of Michigan consumer sentiment index fell to its lowest level since November 2001.

The report, which took many analysts by surprise, countered a more upbeat survey of U.S. retail sales and strong second-quarter earnings from General Electric (GE).

The consumer data stopped what had been a strong European recovery from a four-day slide in the markets, with most jumping by between 3 and 4 percent during the Friday session.

London's FTSE 100 slipped 0.1 percent to 4,224.1, after plunging 4.3 percent on Thursday -- its worst finish in five years -- wiping £45 billion ($70 billion) off the value of the blue-chip index.

The CAC 40 blue chip index in Paris gained 0.5 percent to 3,513.34, after losing 3.95 percent in the previous session, while Frankfurt's electronically traded Xetra Dax was up 0.5 percent to 4,137.36 in late trading, following a decline almost 2 percent on Thursday. (The German market was set to close at 1900 GMT on Friday).

The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, edged up 0.1 percent, led by the telecom and information technology sub-indices. On Thursday, the index lost 3.6 percent -- the lowest point since last September -- losing more than 50 billion euros in value.

Analysts said Friday's initial rebound was due to bargain hunting -- as investors scooped up badly beaten down stocks after four straight days of declines -- and traders balancing their positions before the weekend.

The tech and telecom stocks were boosted by U.S. tech giants Juniper Networks (full story) and Dell Computer (full story) which posted better-than-expected second quarter revenues and guidance late on Thursday.

French telecom equipment maker Alcatel (PCGE) added 7.6 percent to 6.35 euros and German electronic and engineering powerhouse Siemens (FSIE) rose 3.6 percent to 58.72 euros.

Dutch chip equipment maker ASML gained 5.5 percent to 14.15 euros, German rival Infineon (FIFX) was up 3.3 percent to 16.50 euros in late Frankfurt trading and its biggest European rival STMicroelectronics (PSTM) added 2.8 percent to 23.45 euros in Paris.

SAP (FSAP), the German software giant, was up 2.3 percent to 76.50 euros in late trading. On Thursday, it warned its 2002 revenue would fall short of previous estimates after customers canceled orders at the last minute. (Full story)

Cap Gemini (PCAP), Europe's largest computer services company, was up 1.7 percent to 35.60 euros and British chip designer ARM Holdings (ARM) rose 8.9 percent to 131.75 pence.

France Telecom (PFTE) jumped 12.3 percent to 13.84 euros after French Finance Minister Francis Mer said in an interview that his government could sell off its 55 percent stake in the group and provide financial aid if it needs it. Orange (LORA), France Telecom's mobile phone unit, rose 6.2 percent to 4.63 euros.

Deutsche Telekom (FDTE), Europe's largest traditional phone company, gained 4.4 percent to 12.12 euros in late Frankfurt trading as speculation mounted over the future of embattled chief executive Ron Sommer, who many blame for building up a huge debt pile after an acquisition spree. (Full story)

UK telecom group Cable & Wireless (CW) gained 7.1 percent to 172.50 pence. Vodafone (VOD), the world's largest mobile phone operator, rose 5.2 percent to 91 pence, while rival mm02 (OOM) added 6.3 percent to 45.95 pence.

Nokia, the world's biggest mobile phone maker, rose 0.3 percent to 13.93 euros, while Swedish rival Ericisson was flat at 14.60 crowns in late trading.

The AEX index in Amsterdam slipped 0.2 percent and Milan's MIB30 lost 0.8 percent, while the SMI in Zurich rose 1.2 percent.