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Europe fuelled by oil stocks
LONDON, England (CNN) -- European markets continued to trade mostly higher at midday on Friday, with oil stocks rising as the threat of war with Iraq lifted crude prices. The financial sector received a boost from Sweden's Skandia after it announced it was selling its U.S. unit to Prudential Financial for $1.15 billion. London's FTSE 100 was up 0.3 percent to 3,852.4, while the CAC 40 blue chip index in Paris added 0.4 percent to 3,067.78 and Frankfurt's electronically traded Xetra Dax gained 0.1 percent to 2,964.45. The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was up 0.2 percent. Traders were expecting a volatile session on Friday as options contracts expire and many equity managers close their books for the year. At the same time, military tensions are mounting after U.S. Secretary of State Colin Powell said the weapons declaration Iraq submitted to the U.N. Security Council as "a new lie." (Full story) "The background news isn't that good with Iraq and corporate news isn't that positive, so it's probably a good reason for people to step back. We've also got technical things going on pushing things all over the place," David Thwaites, European strategist at BNP Paribas, told Reuters. Threats of a war in the Gulf continued to support higher oil prices, with Brent crude for February delivery trading at $28.14 a barrel in London on Friday -- down about 4 cents from Thursday but still above the target of $28 a barrel set by the Organization of Petroleum Exporting Countries. Higher prices for crude helped lift oil stocks across Europe on Friday. TotalFinaElf (FTOTB) was up 1.7 percent to 134.20 euros. It was also supported by news that the French energy group had its thirteenth promising oil discovery of the coast of Angola. Shell Transport & Trading (SHELL), which owns 40 percent of Royal Dutch/Shell Group -- added 1.4 percent to 396.25 pence and Royal Dutch, which owns the remainder, gained 1 percent to 42.08 in Amsterdam. Meanwhile, Skandia, the Swedish financial services group, jumped 14 percent to 23.80 crowns in Stockholm after its announced it was selling its U.S. unit to Prudential Financial for $1.15 billion as it attempts to cut its debt and improve sluggish profits. (Full story) Vodafone (VOD), Europe's biggest mobile phone operator, was up 1.6 percent to 113 pence. On Friday, Japan's J-Phone Corp. became the first Vodafone unit to start a commercial third-generation (3G) mobile phone service, bringing Europe's largest wireless operator fresh growth potential. (Full story) Interbrew, the world's third-largest brewer, jumped 5.8 percent to 20.98 euros in Brussel. On Friday, it had named John Brock from Cadbury Schweppes to replace Hugo Powell as chief executive. (Full story) The AEX index in Amsterdam was up 1.2 percent and Milan's MIB30 index gained 0.8 percent, while the SMI in Zurich lost 0.1 percent . In the U.S. on Thursday, stocks fell for the third straight session amid protracted concerns of a potential war with Iraq and no clear-cut signs of a pickup in corporate profits. (Full report) The Dow Jones industrial average lost 82.55 points to 8364.80, while the Nasdaq composite declined 7.41 points to 1354.10 and the Standard & Poor's 500 index slipped 6.87 points to 884.25. Wall Street was expected to open slightly higher later on Friday. S&P 500 index futures are up 5.4 points to 890.2 on the Globex trading system, while fair value -- a measure that takes account of interest costs and dividend payments -- was calculated at 886.86.
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