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European markets cling to gains
LONDON, England (CNN) -- European markets ended higher on Thursday, but down from their peaks, as investors shrugged off some weak corporate results and mixed signals in early trading on Wall Street. Markets on both sides of the border appeared to look beyond weaker-than-expected growth in U.S. gross domestic product, as well as other disappointing key data. Investors are now betting the U.S. Federal Reserve will react to the data by cutting interest rates next week in an effort to spur recovery. London's FTSE 100 was up 0.9 percent to 4,039.7 and the CAC 40 blue chip index in Paris added rose 2.1 percent to 3,150.04, while Frankfurt's electronically traded Xetra Dax was up 1.6 percent to 3,162.14 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 up 1.5 percent. Markets eased off their highs after U.S. figures showed GDP grew by 3.2 percent in the third quarter, up from 1.3 percent in the previous three-month period, but below economists forecasts of 3.6 percent. "The markets are looking at today's GDP numbers in the context of the fact that the fourth quarter is looking like it will deliver just one percent growth," Kevin Grice, an economist at American Express Bank. Deutsche Bank (FDBK), Europe's biggest bank, was up 2.1 percent to 44.30 euros -- after falling earlier in the session -- after it delivered a unexpected third-quarter loss. (Full story) However, investors appear to have taken heart from the bank's forecast of positive full-year results. "The way the bad news from Deutsche has been handled by the market shows we're not in bad shape right now. There seems to be sentiment change with the market looking at the good news," Lex Werkheim, a fund manager at Eureffect Asset Management, told Reuters. "A month ago, with the figures Deutsche Bank reported today, its stock would have been down about nine or 10 percent." But Royal Dutch/Shell, the world's second-largest oil company, struck the right tone with investors on Thursday, even as it said third-quarter profit fell 17 percent to $2.24 billion from $2.68 billion in the July-to-September period last year. (Full story) The results were better than analysts had expected. Shares in Shell Transport & Trading (SHEL), which represents 40 percent of Royal/Dutch Shell, rose by 4.5 percent to 410.75 pence in London trading. Royal Dutch, which owns the remaining stake, added 3.5 percent to 43.68 euros in Amsterdam. Technology stocks rose after the U.S. tech-laden Nasdaq soared on Wednesday, led by computer giant IBM (IBM). Its CEO Samuel Palmisano said he saw signs that the economy had bottomed, based on feedback from IBM's international customers. The sector also got a boost from Cap Gemini Ernst & Young (PCAP), Europe's biggest computer services company. Its share were up 5.4 percent to 24.83 euros after the company said it would accelerate cost cutting measures to improve sales and profitability. (Full story) In the auto sector, Fiat was up 5.6 percent to 8.43 euros after it said it would spend 2.5 billion euros ($2.5 billion) in cash into its crisis-hit car unit. The Italian industrial giant also posted a third-quarter operating loss of 339 million euros, with Fiat Auto continuing to bleed cash. (Full story) Germany's Volkswagen (FVOW) was up 5.3 percent to 38.28 euros and BMW (FBMW) was up 3.6 percent to 35.90 euros in late Frankfurt trading. Also reporting on Thursday was Metro (FMEO), the world's number-five retailer. The German group posted a higher-than-expected rise in third-quarter operating profit, showing resilience in the face of a slump in consumer demand. (Full story) Despite the upbeat results, Metro's shares were down 1.1 percent to 23.50 euros as investors cashed in their profits after the stock rose 50 percent in the past month. Shares in Britain's Imperial Chemicals Industries (ICI) jumped 10.2 percent to 247.94 pence after the maker of Dulux paints said it expected a satisfactory year after sales grew across its businesses in the third quarter, boosting profits 12 percent. (Full story) The AEX index in Amsterdam was up 0.8 percent, while the SMI in Zurich was flat and Milan's MIB30 index was down 0.1 percent. In the U.S. on Thursday, stocks searched for direction as investors wondered if the Federal Reserve will cut interest rates next week after the latest data showed the economy remains in feeble health at best. Reports on the manufacturing industry, gross domestic product and initial job claims all came in weaker than had been expected. At 1600 GMT, the Dow Jones industrial average was down 31.84 points to 8395.57 and the Standard & Poor's 500 index was down 2.05 points to 888.66, while Nasdaq composite was up 1.62 points to 1328.35.
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