European markets power ahead

LONDON, England (CNN) -- European markets ended higher on Tuesday, as upbeat outlooks from the auto sector and a positive start on Wall Street outweighed a mixed forecast from mobile phone giant Nokia.

London's FTSE 100 rose 2.8 percent to 4,175.5 and the CAC 40 blue chip index in Paris climbed 3.1 percent to 3,299.64, while Frankfurt's electronically traded Xetra Dax was up 1.6 percent to 3,482.75 in late trading (the German market was set to close at 1800 GMT).

The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was up 2.6 percent, with the mining, electronics and auto sub-indices among the top gainers.

Nokia, the world's biggest mobile phone maker, slipped 0.8 percent to 14.05 euros after it lowered its sales targets for the third quarter but stuck to its profit forecast. (Full story)

Swedish rival Ericsson fell 6.3 percent to 5.95 crowns as analysts said Nokia's profit warning for it networks division also signalled problems for Ericsson, which is the world's biggest wireless equipment maker.

However, the dominant phone operators were mostly higher on Tuesday, with BT Group (BT-A) rising 5.4 percent to 199.75 pence, France Telecom (PFTE) also gaining 5.4 percent to 10.75 euros and Deutsche Telekom (FDTE) was up 2.3 percent to 10.54 euros in late Frankfurt trading.

UK mobile phone operator mm02 (OOM) rose 5.7 percent to 47 pence, while Germany's T-Mobile was up 3.2 percent to 10.63 euros in late Frankfurt trading. The two companies won preliminary approval from the European Commission to share the costs of third-generation mobile networks. (Full story)

The European auto sector was boosted by Ford, the No. 2 U.S. carmaker, which late on Monday forecast a small profit for the current quarter and for all of 2002. (Full story)

DaimlerChrysler (FDCX) also lifted car stocks after delivering an upbeat outlook for its truck unit. Its share were up 4.6 percent to 43.94 euros in late Frankfurt trading. (Full story) Volkswagen (FVOW) was up 3.2 percent to 45.20 euros in late trading, while France's Renault (PRNO) closed up 3.9 percent higher at 47.96 euros in Paris.

Oils stocks rose, led by Europe's biggest oil company BP, as U.S. President George W. Bush looks for support for attacks on Iraq. BP (BP) rose 2.4 percent to 477.8 pence and France's TotalFinaElf (PFP), the biggest company in Paris, gained 2.6 percent to 146.30 euros.

British Airways (BAY), Europe's largest carrier, rose 2.5 percent to 135.92 pence as it said fears of military action against Iraq could result in further job cuts because the public usually avoids air travel during times of conflict. The carrier could also be dropped from the FTSE 100 index of blue-chip stocks at the close of trading on Tuesday, due to a big decline in its market capitalisation. (Full story)

Air France (PAF) was up 4.9 percent to 11.70 euros, erasing some losses after a four-day strike by its pilots

Life insurers were among the top decliners on Tuesday, with traders saying there are concerns that more companies might issues new shares -- following the lead of Legal & General (LGEN), Britain's fourth-biggest insurance company. It was flat at 100 pence -- after notching up strong gain earlier in the session -- after saying it plans to sell shares worth about £786 million ($1.2 billion) to shore up its finances. (Full story)

British insurer Aviva (AV) lost 2.1 percent to 444 pence, while rival Sun Alliance (RSA) was basically flat.

The AEX index in Amsterdam added 3.1 percent and Milan's MIB30 index also advanced 3.1 percent, while the SMI in Zurich rose 1.8 percent.

In the U.S. on Tuesday, markets edged higher in early trading as positive comments from the auto sector overpowered a mixed outlook from mobile handset maker Nokia ahead of the one-year anniversary of the September 11 terrorist attacks and anticipated comments on Iraq and the economy. (Full story)

At 1045 EST, the Dow Jones industrial average was up 62.35 points to 8,581.73 and the Nasdaq composite index added 15.05 points to 1,319.65. The Standard & Poor's 500 index rose 6.19 points to 909.15.